Guide for obtaining a business loan in Dubai, UAE

Guide for obtaining a business loan in Dubai, UAE.

If we had to tell you that you could make more than AED 5000 per day if you rent your car to an individual or a business for a photo shoot or simply as a promotional strategy, Would you believe us? Probably not! But It’s true. Some people make a fortune from this quirky idea.

Starting your own business in Dubai is becoming highly possible due to the 30% reduction in government procedures. This has helped to make Dubai a world-class startup ecosystem.

You can’t move ahead without sufficient balance in your bank account. If you don’t have enough, don’t fear. With the right Loans, you can finance your dreams. At the beginning of the business formation in Dubai, a business loan from UAE banks is good.

Here are some things you may want to keep in mind when applying for a loan.

Business Loan requirements you need to know in Dubai.

When budding entrepreneurs and business owners apply for a loan, UAE banks and financial institutions quickly disburse loans at a reasonable interest rate with or without security, depending on the possible risk amount. This helps them start a new business or expand their existing one or let it grow into good shape. There is an eligibility requirement when applying for a business loan.

Loan Amount: AED 50,000 to AED 5 million

Repayment Term: 2-5 years

Interest Rates: Rates between 15% – 24%, reducing per annum.

Point of Contact: Banks allocate a relationship manager to loan candidates in the UAE.

Corporate Account: The person who lends the amount must have a current active account in a UAE bank for reference.

Check your eligibility for the type of business loan in Dubai you want

When applying for a business loan with any bank in the UAE, you must meet the bank’s criteria. Once you meet the requirements, you can find out how much you can borrow for your business. Different banks have different requirements.

  • The individual should be at least 21 years old.
  • S/He has to present his/hers bank account statements for the last 6 or 12 months.
  • Their company must be functional for at least two years.
  • The lender should possess a corporate account in any of the UAE banks from the banks about their relationship with the applicant.
  • They can obtain a business loan if the business is a subsidiary or a branch of an offshore operational organization.
  • The business’s annual turnover must be at least AED 1 million to apply for a business loan.

How can I enhance my eligibility for getting a business loan?

You can increase your chances to get a business loan by:

  • Having a credit score above 750
  • Your previous debts are already settled, and you haven’t passed any due dates of your instalments or EMIs. Your spotless financial history can be the lifesaver that convinces the bank to loan you.
  • Multiple loan applications can impact your Creditworthiness. That’s why you only need to apply for one loan at a time.
  • The repayment of the loan is as long as you can get it. You will have plenty of time to repay the considerable amount with little effort over a prolonged period.

Opt for the business loan type that’s right

There are various types of loans available in the UAE. You need to select which one is right for you.

Standard business loans are fixed monthly instalments over a prolonged period.

Their payment terms don’t change unless the loan is under a variable rate.

Friends and Family loan, as the name suggests, comes from approaching family and friends. Here the payment terms are more flexible and can be changed easily.

Credit card loans are in the form of advance funds via a credit card. The interest rates are incredibly high.

Small Business Association Baked Loan is government supported and is an excellent option to consider when bank loan applications are unsuccessful. But if the payment terms aren’t met, the government can impose harsh penalties.

Islamic Finance involves all financial activities and investments compliant with Sharia (Islamic Law). Some core principles include being forbidden to earn interest through lending or borrowing money, and money must be earned through legitimate trade and investment assets.

Paperwork for a business loan in the UAE

The paperwork is the same for small and large businesses applying for loans. Keep all the documents ready, as mentioned below, and you should be good to go.

  • Bank statements from the past 12 months.
  • Memorandum of Association/ Board of Resolution/ Share Certificate – Original and a copy.
  • Partner’s passport and visa – Original and Copies.
  • Emirates ID – Original and Copy.
  • Audit Report – Original and Copy
  • Commercial Lease papers – Original and Copy
  • Owner’s Sharing accommodation letter – Original and Copy
  • Hefty transaction invoices – Original and Copy
  • VAT Certificate
  • List of employees received from the Ministry of Labour.
  • Trade License

Here is some financial advice from money experts in the city of Dubai:

  • Take advantage of consulting with an experienced financial advisor or loan broker in Dubai.
  • Take a loan when you have a secure business in hand.
  • You can take a loan with proper scenario planning and analysis.
  • When you have a proven record that your business is viable.
  • Try assessing the advantages and disadvantages of a loan against receiving an equity investment.
  • Calculate how fast your business can generate cash to repay the loan.
  • When you know you are confident about taking a loan in Dubai, be ready with the requirements stated by the lender.

Meet the best financial advisor at Fairway Group

Your business needs money from time to time, and that’s what banks are for. Finding funding in Dubai can be difficult for newbie start-up owners. The lenders, whether private or public or big or small, need documents they can rely on that will support your financial history. If you are not a finance expert, it can be tricky to decide which finance source is the best for you. Therefore, before you proceed with a loan application, consult one of Fairway Group’s business advisors and gain expert guidance. Our business setup specialists can help you navigate different business loan options and pick one that fits your needs. Contact us today to get a consultation from our experts. Contact Fairway and conduct business the fairway.


How to get a business loan in Dubai quickly?

The business should have an annual turnover of 1 million to obtain the loan. Getting a loan should be easy if you have one that’s been in operation for one year and your business is a subsidiary or branch of a company.

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