Bill has operated his plastering and renovation company in Hong Kong for 18 years. He recently took on a HK.5M public housing shopping arcade renovation as a domestic subcontractor. Despite passing site inspections and receiving a HK.8M Interim Certificate signed by the main contractor’s Quantity Surveyor (QS), payment was delayed from 45 to 90 days.
Having already prepaid HK.6M for materials and wages, Bill’s business account dropped to HK1,200. With payroll of HK80,000 due in four days, the site faced an immediate shutdown and severe liquidated damages.
His application for the HKMC SME Financing Guarantee Scheme (SFGS 80%) was declined by the bank’s automated scorecard. The banking algorithm categorized construction progress billings as ‘unpredictable cash flow’ and flagged short-term dips in bank balances as structural distress.
Instead of turning to risky high-interest personal finance, SME Island structured a private credit bridge facility:
- Asset Verification: An independent surveyor verified the HK.8M completed site works within 24 hours.
- Escrow Structure: Established a dedicated escrow account with irrevocable payment instructions directing future receivables straight to debt settlement.
- 72-Hour Bridge: Disbursed HK.5M in working capital at 1.2% monthly interest, ensuring uninterrupted site operations.
On Day 72, the main contractor settled the invoice into the escrow account. The fund deducted principal and financing costs (approximately HK5,000) and released the remaining net profit to Bill’s operating account.
For strategic financing navigation and cash flow structuring, visit smeisland.com.