Hong Kong SME credit guide · Free assessment checklist
SME credit assessment software for Hong Kong lenders
Credit assessment for an SME answers one question: can this business repay from its own cash flow, and what protects the lender if it cannot? The software should show its working so a credit officer can check it.
Core definitions
Put similar concepts in the right place
Each component solves a different problem. Complete lending operations depend on clear data and workflow hand-offs.
| Item | What it does in practice |
|---|---|
| 01Financial spreading | Puts statements for different years and formats into one layout, so ratios can be compared and adjustments can be audited. |
| 02Debt-service cover (DSCR) | Compares the cash the business generates with the debt payments due. The credit policy sets the minimum. |
| 03Leverage and liquidity | Shows how much the business owes against what it owns, and whether it can meet its short-term obligations. |
| 04Bank-account analysis | Shows turnover, balances and unusual movements over several months, as a check on the accounts. |
| 05Scorecard | Scores the file against fixed criteria and shows how each part contributed. |
| 06Stress test | Re-runs repayment capacity under a lower-revenue or higher-rate case to see where cover fails. |
Workflow
Six steps in an SME credit assessment
- 01
Capture the financials
Enter or extract statements by period, and keep the source document beside each figure.
- 02
Adjust and normalise
Remove one-off items and related-party effects. Record who adjusted what, and why.
- 03
Calculate the ratios
Compute debt-service cover, leverage, liquidity and margins the same way for every file.
- 04
Check the bank accounts
Compare the statements with account behaviour over recent months.
- 05
Score and stress
Apply the scorecard, then re-run the case under the policy’s stress scenario.
- 06
Write the recommendation
Summarise strengths, weaknesses and conditions for the approver, with the reason codes behind them.
Printable worksheet
Free: 12-point SME credit assessment checklist
Check each item against a recent SME file. This is an operational self-assessment, not legal or credit advice.
Practical evaluation
Three things credit teams check first
A score is not a decision
The score ranks risk against fixed criteria. Approval still depends on policy, security and judgement, and belongs to a named person.
Unassessed is not a pass
If financial statements are missing, repayment capacity cannot be scored. Showing unassessed points keeps the file honest and shows what to collect.
Reproducibility matters
Auditors and credit committees ask how a result was reached. Saved inputs and a versioned scorecard let anyone repeat it.
Frequently asked questions
Quick answers
What is SME credit assessment software?
It supports the analysis behind an SME loan decision: spreading statements, calculating ratios, reading bank accounts, scoring the file and recording the recommendation.
What is the debt-service coverage ratio?
DSCR compares the cash available to pay debt with the debt payments due in the same period. A value above 1 means the cash covers the payments. The minimum a lender accepts is set by its credit policy.
Does Covenant Desk include an SME scorecard?
Yes. Covenant Desk includes a built-in SME scorecard. When a file has no financial statements, repayment capacity is shown as unassessed instead of passed. Capturing and spreading financial statements for SME cases is part of the tailored SME deployment.
Can AI do the credit analysis?
AI can help read documents and draft summaries, but the figures, the score and the decision must stay traceable and open to review by a person. Covenant Desk treats AI output as a suggestion for staff to confirm.
Primary sources
Official sources and editorial note
This guide reflects official material available on the review date. Requirements can change; each institution should check the latest licence conditions and obtain legal or compliance advice. This page is not legal advice. Read our editorial and corrections policy.
Next step
See how an SME file is assessed.
Talk to us about SME credit assessment in a tailored deployment, or try the Covenant Desk platform it is built on.
Covenant Desk is lending operations software. It does not provide loans, issue credit reports or replace the lender’s final credit decision.