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Need a Small Business Loan in Dubai? Read this Blog Prior to Applying for One!

Need a Small Business Loan in Dubai? Read this Blog Prior to Applying for One! | Dhanguard

For entrepreneurs looking to launch a firm, Dubai is a world of possibilities. The UAE is the first place that springs to mind for anyone looking to start a business outside of their native country. The United Arab Emirates ranks 21st in the World Bank's 2017 Ease of Doing Business Report. This is due to the government's development of unrivaled infrastructure, a rich and diversified culture, and a business environment that have all benefited the economy.

Because of its strong financial system, Dubai, the UAE's commercial metropolis, is a worldwide investment destination. It is not difficult for banks in Dubai to provide financial assistance to entrepreneurs in the form of business loans.

Many banks and credit organizations in Dubai offer various types of business loans, making them relatively straightforward to secure. Keep in mind the 5 Cs of credit, which are capital, capacity, character, collateral, and any extra 'conditions' from the lender, if you want to get the most out of a small company loan. They are not risk-free no matter how simple or convenient they are to obtain. Thus in this blog, Dhanguard will discuss the many types of small business loans available in Dubai, as well as the dangers and considerations you should make before applying for a small business loan.

So without any further ado, let’s learn!

In Dubai, there are various types of Small Business Loans.

Small Business Association

If your local bank refuses to give you a business loan in Dubai, you can turn to the SBA (Small Business Association). The government backs SBA loans. They are an excellent alternative for small enterprises, but the risk is that if you are unable to repay, the government will pursue you aggressively. People normally avoid not paying back since the repercussions are so severe.

Typical Business Loans

You normally pay monthly payments for a set amount of time in this style. The conditions and amount of payment are set in stone and cannot be changed afterwards. If you take up a variable-rate loan, though, the conditions and amount may alter. If you do not comply with the bank's terms and conditions, the contract and your account may be terminated.

Loans on Credit Cards

Small firms are permitted to obtain cash advances by credit card, although the interest rate is significant. It's quite difficult to get out of debt, yet it's still preferable to an SBA loan. Every sort of company loan has some risk, which is logical given that lenders are entrusting you with their money. If you have original and legitimate documentation, getting a business loan in Dubai is simple. The most significant of these is a Trade License.

Trade License

The government issues a businessman a trade license to operate his business. The type of trade license you need is determined by your business activity. Its price fluctuates as well. The majority of business owners prefer a general trade license, which allows them to conduct business in any commodity. A trade license is required not just to obtain a business loan, but also to obtain personal, home, and auto loans.

The following documents are also necessary to acquire a business loan in Dubai:

  • Contractual agreement (in case of partnership)

  • Passport

  • Emirates ID  

  • Bank Statement

A Business Loan taken from a Friend or Family

You might also seek a business loan from a family member or a friend. The benefit would be the flexibility of the terms and the lack of interest, but the danger would be that you may ruin the relationship if you were unable to repay.

Read More:Why Bank Guarantee is Important for Business Loan in UAE?

Getting a Small Business Loan in Dubai: Eligibility Criteria

You need to know if you qualify for a bank loan. Not every bank offers plans that are tailored to your specific requirements. Instead, they have their own set of requirements. Most significantly, banks examine the nature of the firm and the directors/partners/shareholders' profiles prior to making a loan. Banks assess their risk in the sector by looking at how well-established the company is, how long it has been in business, and what assets it possesses.

The following are the most typical specifications:

  1. At least one year of operation is required.

  2. A loan is simple to obtain for an offshore company's branch or representative office.

  3. Annual minimum turnover

Interest rates for business loans are established by banks. SME interest rates are typically lower (Small and Medium Enterprises). SMEs make a significant contribution to the UAE economy. Banks and other financial institutions recognise the importance of SMEs and provide business loans to them.

The criteria for obtaining a business loan for a small business are not completely defined. 

It is dependent on,

  1. The client's business and the industry in which he works.

  2. Performance over time

  3. Needs for financing or risk mitigation vs. what has already been sourced

  4. Client's business plans for the future

The most essential aspect in deciding loan amount is turnover. The turnover of a corporation can be seen in the bank account and audited financial accounts.

Additional Benefits of Small business Loans

Banks provide a variety of services in addition to small business loans.

  • Cards with no fees

  • Life insurance coverage is provided at no cost.

  • Business financing that follow Shariah

  • Interest rates can be fixed or reduced.

  • There is no need to put up any money as collateral.


Obtaining a business loan in Dubai is a simple but difficult process. For loan approval, you must obtain the appropriate license and prepare the essential documentation. Dubai's banks have tight compliance policies. Your loan application will be rejected if there is a difference between your business activity and your license. To avoid this, we recommend that you contact our experts, who will guide you through the process of securing a loan for your business. Thus, we hope this blog provided you with insightful information. For more information on other related aspects, feel free to check out our website as well or get in touch with our experts by visiting our Branch Office.


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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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