Dubai is a preferred business destination for companies for a variety of reasons. Starting a business requires proper planning, financial stability, and exact guidance. The United Arab Emirates has created a conducive environment for entrepreneurs through many policies. One such policy is that they also provide Business Loans at lucrative prices.
Dubai has many unique and different loan proposals that help new entrepreneurs make the most out of it. In this blog, we will discuss ways in which entrepreneurs can avail t a business loan in the UAE.
Eligibility Criteria Applying for a Corporate Loan in Dubai
It is easy to get a Business Loan approved in Dubai, but before going through this process, make sure you are eligible for the same. If you are seeking help from the national banks in Dubai, make sure to meet their criteria as mentioned below-
- The business you are asking for a loan must be at least operating for one year or over.
- Make sure the company has a corporate account as this is one of the key requirements while applying for a business loan in Dubai.
- There is a certain age criterion for applying for a loan in Dubai. The entrepreneur or business owner must have completed 21 years.
- It is also important to maintain at least 1 million AED turnover annually to apply for a loan. This can go up, depending on the banks.
- Businesses must have proper accounting and tax documentation as well as important evidence to present before the bank.
Required Paperwork to avail of a Loan in Dubai
As mentioned in the blog, seeking a Business Loan requires a lot of documentation and verification. Here are a few highlights that will guide you in gathering the right papers before applying for a business loan in the UAE.
- An applicant must have an active passport. Or they can submit a Xerox of the Emirates ID as strong proof.
- Submission of a bank statement for at least the past 6 months or more.
- Having a business license
- Documents such as Articles of Association, Memorandum of Association,
- Power of Attorney, and Memorandum of Understanding (if required)
- In addition, the bank can ask for other documents, including a Value-Added Tax certification, Employee details, and a Rent agreement.
Types of Business Loan in Dubai
As a business hub, Dubai attracts entrepreneurs to come to the country and start a business. This is a strategy that boosts the Foreign Direct Investment in Dubai. Here is a list of a few business loans that will help business owners to opt according to their business needs.
Corporate Loan- This loan offers easy terms which include a fixed amount of monthly repayments after a certain amount of time. Also, this method is fixed unless and until the loan is under an alterable tariff.
Family & Friends Loan- It is not a bank loan. It is sort of a financial help from family and friends with the promise of a timely return. These types of loans are not bound by any specific time and regulations but this can affect the relationship between family & friends.
Small Business Administration Loan- This government-backed option is especially helpful if your bank loan request has been denied. In case of any mishaps, the government can apply a heavy fine on the businesses.
Invoice financing- Sometimes referred to as invoice factoring, allows you to take out a loan secured by unpaid invoices. You will be paid in advance, however there will be a cost. Although this is frequently more expensive than the interest rate on a conventional loan, it is a way to obtain fast cash in an emergency.
Islamic Finance- Dubai is an Islamic country. And, in Islam, taking an interest on a loan is strictly prohibited. The country offers Islamic Finance, which prohibits taking interest. Also, there are a few conditions in which the money should be invested in productive ways and earned with legitimate trade.
Whatever the business is, financial requirements always pop out as a matter of concern. Governments and banks extend their full support to new entrepreneurs, all we need is to be aware of the rules and regulations and ask for assistance from professionals.
At Markai Corporate Services, business owners can benefit from complete business services, from opening a bank account to accessing VAT & Bookkeeping services and receiving assistance in payroll management, all with the utmost professionalism and ethics. Markai Corporate Sevices ensures that the client's business is on track for great success.
