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Do you want a Business Loan in Dubai ? :The Only Guide you Need

Dubai is an absolute place to start a new business because of its attractive tax policies and ease of doing business. If you want to get enough money to create a new business, you can apply for various business loans. Securing this funding is an essential step toward successfully starting and maintaining a business in Dubai

With its appealing tax rules and simplicity of doing enterprise, Dubai is an excellent vicinity to install a brand new enterprise venture. If you're seeking to attain enough capital to finance your new enterprise, you could select to use for diverse styles of enterprise loans. Securing this investment is a stepping stone toward correctly beginning an enterprise in Dubai and making sure its survival.

This blog will walk you through the top tips for applying for a business loan in Dubai.

Business Loan in Dubai:Brief Description

Business loans are in high demand in small and medium-sized industries,  business organisations and even entrepreneurs, just to name a few. Almost every major bank or  financial institution in Dubai offers trade finance solutions. There are several business loan options  in Dubai and one must be very careful in choosing the one that best suits our needs  and therefore you should ask what you need to get this loan further and it  will be  processed quickly  with no problems.Getting a business loan in Dubai is easy but sometimes it seems like a complicated process. You must obtain the appropriate license and  prepare the necessary documents for credit approval. Banks in Dubai impose strict compliance rules. If there are discrepancies between business activities and the concession, the bank will reject your application. To avoid this, we at Dhanguard will guide you properly to get a loan for your business.

Features and Benefit for Prevailing Business Loan in Dubai

Different banks offer different  conditions; However, the more general terms for business loans in Dubai  are:

  • The loan amount can range from AED 50,000 to AED  5 million.

  • Most banks do not require collateral.

  • Flexible payment options that can range from 25 years. The repayment period usually depends on the amount of the loan taken out.

  • The documentation is usually very simple and the approval process is also quick if you have prepared all the documents.Interest rates also vary from  bank to bank.

  • Along with the business loan, you will also receive a business checking account with the lending bank, which does not require a minimum balance.

  • Most banks in the UAE offer a credit card in addition to business loans.

Few Important Guideline to be Noticed before Obtaining a Business Loan 

Select the Right Type of Business Loan

You can consider different types and amounts of business loans. Here is a breakdown of the benefits of 4 main types of business loans: 

 A Standard Business Loan 

 Fixed monthly payments over a long period of time 

 Payment terms are usually fixed unless the loan has a variable interest rate.Banks in the UAE offer various types of business loans known as SME loans. That is, loans for small and medium-sized businesses. These are for small and medium-sized businesses, and they offer loans at lower interest rates in comparison.

Friend and Family Loan

Borrowing money from any individual or group of individuals who are not licensed by the country's central bank is prohibited in the UAE. In the UAE, it is common for people to borrow money from friends and family. The condition is that these loans be made available without charging interest on repayment.

  • Directly approaching friends and relatives for a loan 

  • Risk of losing relationships due to the payment 

Credit Card Loan 

A credit card is a pre-approved loan that is granted up to the credit card's maximum limit. Because of the revolving debt, credit cards are among the most expensive forms of financing.The basic rule of credit card usage is how much you spend on your credit card each month and how much you can pay back on time.

  • In the form of an advance of money via a credit card 

  • Fees usually very high interest rates 

Small Business Loan (SBA) 

UAE is a country that is thought to be financially stable. As a result, for financial assistance, one must seek a loan from a UAE bank. Dhanguard's specialists can assist you in obtaining a Business Loan in the UAE.

  • Sustained by the Government

  • This is a good option if your bank loan applications were unsuccessful 

  • If payment terms requirements are not met, the government can impose severe penalties

Get Familiar with the Islamic Finance in Dubai

Some of the basic principles of Islamic finance include:

  • It is forbidden to earn interest by lending or borrowing money.

  • Money must be made through lawful trading and investment of assets.

  • Money must be spent productively

Prepare the Right Documentation

Preparing the necessary paperwork for obtaining a business loan in advance can speed up the application process. 

These are the usual documents banks require when applying for a business loan: 

  • Bank statements for the past 6-12 months; 

  • Bank Application Form; 

  • Articles of Incorporation / Memorandum of Association (MOA) / Power of Attorney (POA) / Association Agreement; 

  • Copy of your trade license and  original document for validation; 

  • Copy of the loan applicant's passport

Read More :-How to get a Small Business Loan

Eligibility Criteria for Obtaining a Business Loan in Dubai

You need to know whether or not you qualify for a bank loan. Not all banks have policies  tailored to your specific needs. Instead, each has its own admission requirements. More importantly, before approving a loan, banks check the nature of the company and the profiles of the directors/partners/shareholders. Banks assess your risk in the industry by looking at how well established you are, how long you have been in business and what assets you have.

The most common requirements are: 

  • A company must be at least 1 year old. 

  • There should be a commercial establishment. 

  • An active company account must exist.

Conclusion

Every business loan has its own risks. Therefore, there is no clear right or wrong choice. Instead, it's important to assess which credit characteristics you value most and help your business thrive. Good information and preparation for the application process can make the process much easier.

At  Dhanguard, we're here to help you build your new business venture and ensure you're on the right path to success. Contact us now to see how we can help you!

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Frequently Asked Questions

The bank of UAE provides flexible repayment option that can range from one to four years.

Yes, the application for loan can be rejected if the applicant has not provided the reason for such loan with proper documentation.

No, your application for loan will be rejected if you apply for Multiple Loan.

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