How To Take A Business Loan in Dubai
If you are looking to start a business or expand in Dubai, a loan can be a great way to get the financing you need.
It can be difficult, especially for start-ups, to get investment. However, if you want to continue and grow your business, it is important to take out a loan.
Dubai is an attractive travel destination for small and medium-sized businesses. It offers flexible economic policies, tax breaks, and an excellent infrastructure.
UAE banks have provided nearly AED 93.4 billion in business loans, making them a great option for entrepreneurs. They offer loans ranging from AED 50,000 to AED 5 million depending on the financial profile of the applicant.
The repayment period is usually 2 to 5 years, with interest rates of 15 to 25% per year. The interest rate depends on the credit rating, monthly income, number of active loans, loan size, etc. As proof, the lender must have a current account with one of the banks in the UAE.
Types Of Business Loans in Dubai
Standard Loan
- It is granted under certain conditions, including a monthly repayment. Loan amounts can be negotiated with interest rates.
Loan Guaranteed By The Small Business Association (SBA)
- The SBA helps small businesses get loan financing. It is supported by the government, so the risk is low.
Islamic Loan
- This business loan is interest-free and you have to share your earnings with the bank.
Credit Card
- The allocation is made via a credit card. However, this comes with high-interest rates.
Eligibility Criteria For Bank Loan Application
- The candidate must be at least 21 years old.
- The business must have existed for at least one year.
- Businesses must have a business account.
- Bank statements from the last 6 to 12 months.
- Annual income must be at least AED 1 million to be eligible for a loan. However, this varies from bank to bank.
- If your company is a subsidiary or branch of a foreign company, you may find it easier to get a loan.
Required Documents
- Commercial License.
- Bank Application.
- Copy of the loan applicant’s passport.
- Bank statement (last 6 to 12 months).
- Copy or original of the Articles of Association.
- Copy or original of the power of attorney
- Copy or original of the deed of incorporation.
- Rental contract.
- Audit reports.
- The Department of Labor has published the list of employees.
- Original or copy of Emirates ID.
- Original or copy of commercial lease documents (if desired).
- Original and copy of the VAT certificate.
- bill of lading (if desired).
How To Improve The Chances Of Getting A Business Loan in Dubai
- Make sure your credit score is above 750.
- All installments such as loans, credit card bills, or other debts are paid on time.
- You do not apply for a loan from different banks or financial institutions.
Also Read: Why is Everyone Moving To Dubai To Start A Business?