Today’s economy in Dubai hugely relies on SMEs. In fact, SMEs make up 95% of the business presence in Dubai. But not all businesses can afford to kickstart their work unless they get financial help. Luckily, SME loans in Dubai are here to help business owners get started! So today, we’re gonna talk about the SME loans Dubai has to offer and how your business can be eligible for them. Now, let’s jump into it all, shall we?
Types of SME Loans in Dubai
There are several types of loans that your SME can get in Dubai. Each serves a different purpose, and based on that you can choose the right type for you. So, let’s check them out right now:
- Term Loans: The most basic type of loans. This is when you take a sum of money, and repay it over a period of time. Now, this is the perfect type of loan if your company wants to expand or go for a long-term investment.
- Trade Finance: This type of loans is specific for businesses that work in trading, aka import and export. It helps with the financing of the transactions.
- Asset-Based Loans: The only way to get this loan is by having it secured against physical business assets. This includes properties, machinery, or even products and inventory.
- Working Capital Loans: In case your company catches itself in a liquidity bottleneck, this type of loan is ideal to cover short-term expenses. Things like salaries, rents, etc… (But we also recommend getting CFO services to avoid getting to a point where your company is short on cash).
- Invoice Financing: If you’re stuck and need quick cash, this is the type of loan you can go for. You can borrow money against unpaid invoices to secure cash flow. So you’ll get the cash now, but the fee you’ll pay later will be higher than traditional loans.
How to Be Eligible for These Loans?
So requirements can vary from bank to bank when it comes to SME loans in Dubai. However, there are always general criteria like the following:
- You should have a valid UAE trade license.
- Your business should have a history of operating (usually 1 to 3 years)
- Bank statements ready (6 to 12 months)
- A minimum annual revenue that banks/financial institutions set
- Good financial records and credit history
Banks and Institutions That Offer Loans in Dubai
- Emirates NBD
- Mashreq Bank
- ADCB
- RAKBANK
- Dubai Islamic Bank
- Noor Bank
- Government supported initiatives (Mohammed Bin Rashid Fund, Dubai SME 100 Program, EDB, etc…)
Now, before you settle with a bank for your SME loans in Dubai, you should first compare different rates and terms across your options. Second, make sure your company meets all the criteria we previously listed. And of course, you should have a strong business plan and future projections ready. This will lead to reassurance for both parties that you know where the money will go and how you will eventually successfully pay it back.