Revealing bank lending decisions for contractors in Hong Kong

Banks’ conservative attitude towards construction loan applications has been considered as the biggest obstacle to contractors’ business development. The objective of this research is to explore and understand banks’ perception on contractors’ borrowing in Hong Kong through three stages. First, a framework that classified a set of criteria on loan application assessment was formulated. Second, a questionnaire survey was conducted to determine the key criteria by testing the theoretical framework with a number of banks. Third, a number of bankers were interviewed to explore the reasoning behind the tested framework. The paper presents findings on how banks have processed and evaluated contractors’ loan applications. Further, similar lending policies adopted by international banks in Hong Kong would also be applied internationally. Accordingly, the findings would help contractors, not only in Hong Kong but also internationally, to find ways to enhance the success of their loan applications.