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Business Loan

Business Loan Facility 

Business Loans will help you grow your business. If you want business loan for new company in Dubai you have came to the right place. For assistance in securing a Business Loan in the UAE, contact our experts at Dhanguard.

Apply for your Business Funding now. No restriction on any Sector or Nationality.  Facility Open for Expats & UAE residents.

  • Collateral Free
  • High loan amounts of up to AED 3 million*
  • Flexible repayment periods of up to 60 months*
  • Minimum documentation
  • Minimum annual turnover of 1 million required.   

 

To sustain, grow, or refinance their business, many business owners in the United Arab Emirates choose to take out a business loan. Depending on the potential risk, banks and other financial institutions in the UAE offer business loans at fair interest rates with or without security.

There are various eligibility requirements that you must meet whether you are seeking for a business loan to start a brand new or an existing business.

Today Dhanguard will act as a guide, and teach you everything you need to know about Business Loans in the United Arab Emirates. So without any further ado, let’s learn!

Along with a wide array of services provided, Dhanguard also helps with Mainland, Offshore and  Business Account opening as well.

What are the Features of a Business Loan in the UAE?

The features of a business loan in UAE are enumerated below-

 

The Period of Repayment

A business loan has a repayment period that lasts between two and five years. The length of the loan payback period is also influenced by the loan amount requested.

Rate of Interests

Different banks may charge different interest rates for business loans. The applicants' interest rates, however, are affected by a number of variables, including their credit history, monthly income, the number of loans they have open, the size of the loan, etc. An annual reduction in interest rates from 15% to 24% is typical for company loans.

Relationship Manager

The loan borrowers are given a relationship manager by the majority of banks in the United Arab Emirates so that they can get in touch with them if they have any questions.

Business Account

On the day they apply for a business loan, the applicants must have an open business account with one of the banks in the United Arab Emirates. This assists the lender in obtaining a reference from the bank regarding their interaction with the applicant.

The Amount of Loan

In the United Arab Emirates, business loans typically vary from AED 50,000 to 5,000,000. The banks examine the applicant's financial situation and base the loan amount they offer on it.

What is the prescribed Eligibility Criteria for a Business Loan in the UAE?

Ask your bank what requirements you must fulfill in order to be eligible for a business loan in the UAE. The requirements could differ from bank to bank. 

We have mentioned the most general criteria of any bank below-

Income 

Your company must have been operational for at least a year.

Operation 

If your company is a subsidiary or branch of an overseas operating organization, getting a business loan should be simple.

Turnover

In order to be eligible for a business loan, your yearly turnover must be at least 1 million AED.

Age Requirement

There is a 21 year old minimum age requirement for applicants.

Owning a Business Account

You need to have a business account with a bank in the United Arab Emirates.

Different sorts of business loans are available from banks and other financial organizations for various kinds of enterprises. A company loan might have an amortization period of one to four years.

How to get a Business Loan in Dubai?

Dubai is a great place to start a new company because of its favorable tax policies and ease of doing business. You have the option to apply for numerous business loans if you need to raise enough money to finance your new company. A crucial first step in successfully launching a business in Dubai and ensuring its existence is securing this capital.

Therefore we have mentioned our top tips for applying for a business loan in Dubai-

Determine Your Eligibility to Apply for a Business Loan

The qualifying requirements must be met in order for many small enterprises to be eligible for a business loan. From bank to bank in the UAE, the specific requirements vary. But these minimal conditions apply to all banks:

  • The company has to have been in operation for at least one year.

  • The yearly minimum turnover (amount varies per bank)

  • The recent six to twelve month business or personal bank statements

Make The Proper Loan Selection for your Business

Different sorts and amounts of company loans are something you might take into consideration. The advantages of four major categories of business loans are described below:

Small Business Association (SBA) Backed Loan

  • When your applications for bank loans have been denied, this is a viable choice.

  • It is supported by the government of UAE

  • Government officials have the right to levy severe fines if payment terms are not adhered to.

Standard Business Loan

  • It is a kind of regular business loan in which fixed monthly payments are made over a long period of time, 

  • Unless the loan is subject to a variable rate, payment periods are usually fixed.

Read more on Islamic finance in Dubai and become familiar with the Concept

Islamic finance covers all financial transactions and investments that adhere to Sharia, or Islamic law. Islamic finance is based on a number of fundamental concepts, some of which are as follows:

  • Money must be made through ethical business dealings and asset investments.

  • Money must be used productively.

  • It is illegal to lend or borrow money in order to gain interest.

What Distinctions exist between Traditional Finance and Islamic Finance?

Islamic Finance consequently follows the idea of profit and loss sharing under a contract because interest is forbidden by Islamic Law. Although there are numerous distinct kinds of contracts, the mudarabah is one of the most popular. The earnings and losses will be allocated between the investor and the entrepreneur in accordance with this contract, which is very specific about it. The responsibility for all losses will also fall on the investor. The entrepreneur must pay interest regardless of the company's financial situation, according to conventional finance, which is the opposite of this.

Prepare all the Relevant Documents

By having the documents required for a business loan ready in advance, the application process can be sped up.

In order to process a loan request for a business in UAE, banks often need the following documents:

 

  • The bank records from the previous six to twelve months

  • A filled out bank application

  • a partnership agreement, a power of attorney, a memorandum of association, or other similar document

  • For the purpose of validation, you must submit a copy of your trade license together with the genuine document

  • The Passport photocopy for loan applicant

The following extra documents, which you should also have on hand, are frequently requested by banks in addition to the ones stated above, and are therefore vital to have on hand:

 

  • Audit Report

  • A list of employees from the Ministry of Labour

  • Bill of Lading (if applicable)

  • Trade License

  • Tenancy Agreement for Owners' Home or Letter of Accommodation for Sharing

  • High Volume Transaction bills

  • Certificate for VAT

What can you do to enhance your Eligibility for a Business Loan in UAE?

You can increase your eligibility for business loans by taking the following few easy steps which are mentioned below-

Limit the number of loans you take out at once

To qualify for a company loan, first evaluate your financial needs. A further recommendation is to avoid submitting several loan applications as this can harm your creditworthiness.

Credit Score

Make careful to keep your credit score at or above 750. It makes it easier to quickly approve a business loan.

Go with a longer repayment term

A longer loan repayment period is something you should try to choose. It will enable you to comfortably repay your business loan over time. The lower installment amount that results from selecting a longer repayment term is another benefit.

Pay Off Old Debts

Try to pay off any outstanding debts you have, including loans, credit card balances, and other responsibilities. And be sure to make timely payments on all of your installments. You can improve your eligibility for a company loan by doing this, since it will help you establish a pristine repayment history.

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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