Hong Kong SME lending guide · Free origination checklist
SME loan origination software for Hong Kong banks and lenders
An SME loan is decided on a company, not a person: its directors and shareholders, its accounts, its bank statements, what secures the loan and who guarantees it. This guide sets out what SME origination software should handle, and how to test it before you buy.
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 |
|---|---|
| 01Company file | Holds the borrower company’s registration details, directors, shareholders and related parties in one record, with the documents behind each. |
| 02Financial spreading | Puts financial statements into comparable periods and ratios such as debt-service cover, leverage and liquidity, and records every adjustment. |
| 03Bank-account analysis | Reads account behaviour over several months: turnover, balances and unusual movements. |
| 04Security and guarantees | Records collateral, valuations and guarantors, and how much each actually supports the facility. |
| 05Facility structure | Sets the facility amount, tenor, pricing, conditions and covenants before approval. |
| 06Approval and documents | Routes the case to the right authority, keeps the decision record and produces the facility letter. |
Background
What changes when the borrower is a company
Most origination guides are written for consumer loans. SME lending is decided on different evidence, over a longer file, by more people.
Who is the borrower?
A company is not one person. The decision touches its directors, its shareholders and any related company that shares cash or gives guarantees. The file has to show those links, and show when the same people appear in another application.
Identity checks and sanctions screening apply to the company and to the people behind it.
Where does repayment come from?
For a person, repayment comes from salary. For a company, it comes from cash flow, which has to be read from financial statements and bank accounts. Statements arrive in different formats and periods, and need adjusting before they can be compared.
When statements are missing, the honest answer is that the file cannot yet be scored on repayment capacity. A system should say so rather than give a pass.
What backs the loan?
Many SME facilities rely on property, equipment or personal guarantees. A guarantee earns credit for being enforceable and for the guarantor’s capacity to pay, not for existing on paper.
Valuations age, so the file should record the date and basis of each one.
What happens after approval?
Conditions precedent, financial covenants and periodic reviews continue for the life of the facility. They belong to origination because they are agreed at approval.
Where a system stops at the facility letter, this work tends to move into spreadsheets.
Book an SME lending walkthrough
A working session on your own SME credit process and approval matrix.
Workflow
Seven stages an SME origination system should cover
- 01
Open the company file
Record the company, its directors, shareholders and related parties once, and stop duplicate cases for the same group.
- 02
Collect and check documents
Track what is missing, what has arrived and which version is current.
- 03
Spread the financials
Capture statements by period, adjust for one-off items and calculate the ratios the credit policy uses.
- 04
Assess repayment capacity
Combine cash flow, bank-account behaviour, credit history and business quality, and say clearly what could not be assessed.
- 05
Structure the facility
Set amount, tenor, pricing, security, guarantees, conditions and covenants.
- 06
Approve within authority
Route the case by amount and policy exception to a named approver, and keep the reason.
- 07
Issue the letter and hand over
Produce the facility letter, then pass the approved terms, conditions and covenants to servicing and monitoring without re-keying.
Printable worksheet
Free: 12-point SME origination checklist
Use it in a working session with credit, relationship, risk and operations. Fewer than nine ticks point to gaps in the file, the assessment or the approval record. This is an operational self-assessment, not legal or compliance advice.
Practical evaluation
Three tests before you commit
Ask for the company file, not the form
Many tools offer an online application. Ask to see one case with a company, three directors, a guarantor and two properties, and how each connects.
Test the case with missing data
Real SME files arrive incomplete. A good system says what it could not assess. A weak one scores the gaps as if they were fine.
Follow the case past approval
Conditions, covenants and reviews are where a file goes quiet. Check that they are tracked after the facility letter, not left in the credit memo.
Covenant Desk SME deployment
What a Covenant Desk SME deployment covers
The SME workflow is built on the Covenant Desk lending platform and tailored for each institution. Here is what it does.
Company file
Company details, directors, shareholders and guarantors sit in one case. Identity numbers are stored encrypted and shown masked.
Intake and documents
Staff open cases, or the company applies on your own online form. Staff can send a secure upload link, and each case has a document checklist. Text-based PDFs of financial statements, bank statements and business registration certificates are read into proposed figures that a person confirms, with the page and line shown.
Financial spreading
Statements are spread by period. Debt-service cover, leverage, current ratio and interest cover are calculated, and results export to Excel.
Bank-account analysis
Monthly inflows, outflows, closing balance, days overdrawn and returned items, entered by hand or read from a PDF.
Scorecard and stress test
A 100-point SME scorecard with versioned results. It will not grade a file with too little evidence, and a file that cannot be graded cannot be approved. One standard downside case is run, and structuring options are compared.
Security, guarantees and facilities
Collateral and guarantees are recorded with haircuts, recoverable value, loan-to-value and an expected-loss estimate. Term, instalment, revolving and overdraft facilities each get a repayment schedule.
Covenants and conditions
Financial covenants and conditions are recorded. Covenant tests run when a user starts them, and breaches and approved waivers are logged.
Approval, audit and sanctions
Authority limits, escalation, and a second-person check on policy exceptions that you can require. The action log is append-only and hash-chained, so changes to it can be detected. The company and each party are screened against the UN Security Council list at approval, final letter and booking.
Letters and reports
A facility letter as a PDF with a standard-terms section for your legal team’s wording, a credit memo print page, and a pipeline, turnaround and decline-reason report that exports to Excel.
Frequently asked questions
Quick answers
What is SME loan origination software?
It manages the steps from an SME’s application to an approved, documented facility: company file, documents, financial analysis, security and guarantees, approval and the facility letter. It sits before the loan ledger or core banking system.
How is it different from a personal-loan origination system?
The borrower is a company with related people, accounts and security. Repayment depends on business cash flow rather than payslips, so the system has to handle financial statements, bank-account behaviour and collateral.
Does the software approve or decline SME loans?
No. It applies the institution’s policy, shows reason codes and routes the case. A named person approves or declines, and the system keeps that record.
Is this for banks or for non-bank lenders?
Both. We tailor the workflow to each institution’s credit policy, approval matrix and document templates. Licensed money lenders and finance companies that make business loans can use it too.
Can Covenant Desk build this for our institution?
Yes. SME origination is delivered as a tailored deployment of the Covenant Desk platform. We start from the working product and adapt it to your credit policy, approval matrix, document templates and systems.
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
Start from a working SME origination workflow.
Talk to us about a tailored SME origination 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.