Financing your New Business – Options to Consider in UAE

Working in the United Arab Emirates offers numerous opportunities for individuals to explore, be it in the form of a lucrative job or a new business startup. It is highly common in Dubai, Sharjah, Abu Dhabi or any other emirate for example in the UAE to have started as an SME and have earned considerably both in terms of name and fame. However, the key challenge lies in pushing your idea to take form of an actual company and the biggest roadblock is MONEY.

In this article, we discuss about some good options for receiving financing for entrepreneurs looking forwards to kick start their SMEs in the emirates. We have included financing options for both Emiratis and Non-Emirates in the UAE.

Business Financing from Banking Institutions

In the UAE, you may have received a call at least once asking if you are interested in a business loan. Almost every bank in the emirates have SME solutions offering quick and convenient financing solutions. This includes Emirates NBD, HSBC, NBAD, ADCB, FGB and many more. However, it is vital to know that you need to have your business up and running for at least 6 months from license and registration to apply for a bank loan.

You can apply for a corporate bank loan to support your new business or expand you existing business. You can receive a business loan up to AED 5 million, which is subject to change based on the bank and comes with a repayment period of up to 72 months.

Investment Financing Companies

Apart from banking institutions, there are private and government-run finance institutions that support SMEs in availing funding solutions. This includes government initiated funds such as Mohammed bin Rashid Fund for SME in Dubai which offers financing solutions to Emirati entrepreneurs.

In Abu Dhabi, Khalifa Fund is offering financing solutions for very small businesses with support of up to AED 100,000. These financing companies or funds consider the business size (micro, small or medium) and at least 3 months of business operations to be eligible for financing support. Private financing companies include Envestors, Intel Capital, N2V, MBC ventures, and TwoFour54 to name a few.

Applying for investment financers such as Kalifa fund usually follows a business plan submission. Make sure to secure the approved business plan template from the concerned authority before you start.

Other options to secure financing

If you find it difficult to secure finance from the above mediums, your third option includes:

a. Third party investors: These are individuals who want to invest in SMEs in UAE supported by an agreement of profit sharing / interest sharing. Be careful when you deal with such investors as it may affect your future business or lead to unwanted troubles arising due to clash of ideas or investment.

b. Advance from clients: If you already have customers who are willing to work with you, try to negotiate a cash advance for services delivered in the future. Though the financing received in this option is small, it may come handy.

Turning your new business idea into a reality takes courage, and more importantly, a clear direction. Prepare yourself to write down you goals and spread them across evenly, and do so for your finances too. It is highly important that you consider putting down your agreements with any financier in writing to avoid issues later on.

When you apply for business financing, be it private, government or third party, a business plan is required. Make sure your business plan is prepared professionally, covering all important segments about your business and service offering. For help, you can reach out to us on info.writingzing@gmail.com or call us on 971 521276156.