Business Financing In Small UAE – Financing Options Offered For Small-Scale Business In The UAE
United Arab Emirates (UAE) has the richest economy in the Middle East and is continuously rising to rival the current business superpowers in the known world.
Due to the high-influx of foreign and local investors aiming to start their profitable enterprise in UAE, offers in business financing in small UAE is plentiful for those who are in need of a helping hand in boosting their budget for the investment.
Status of Financial Aids in UAE
Financial institutions, such as banks, as well as private lenders are offering plenty of financial solutions for small-scale businesses — either as a means to start the business or for use in expansion.
Business financing in small UAE caters not only to individual business but also to specific entrepreneurs as well.
In the current market trend, offers by financial institutions not only target the businessmen, but women as well.
Studies show that more and more women are delving into the business world in UAE; though small, women are now taking it into their standards to compete with their male counterparts — delving into the modern way of entrepreneurship in a male-driven society.
Financial Options in the UAE
There are different options to choose from if you’re looking for business financing in small UAE. These offers come in the form of:
1. Term Loans
The most common financial option available in the UAE is the Term Loan. This type of loan is mainly catered to businesses in need of procuring fixed assets to help with business operations — either as a new enterprise in UAE or to expand the current venture.
Fixed assets may come in the form of owned commercial space, purchase of equipments to conform to their business’ operation, and the likes. Term Loans are payable in 20 to 25 years, though it may depend on the institution that offered it to the investor.
2. Working Capital Finance
This type of business financing in small UAE caters more to businesses who are in need of additional funds for day-to-day needs. The fund may be used for procuring office supplies, operation cost, restocking inventory, and other form of payments.
3. Bank Guarantees and Letter of Credit
Bank Guarantees and Letter of Credit is also another business financial in small UAE offered to small-scale business for payment. Though both are similar in terms of seller-buyer-bank or vice versa transactions, both have some differences that need to be cleared up before you opt for this option.
As an example, Bank Guarantee is used when the party named in the contract is unable to offer payment to the buyer or seller. The bank acts as a money source to pay off the dues in the business’ stead. Letter of Credit on the other hand is also paid by the bank when the service is rendered.
Requirement for Financial Aid
Despite the availability of different business financing in small UAE offers, it doesn’t mean that everyone is eligible. Keep in mind that financial institutions — both bank and non-bank organizations — are going to guarantee that the money is put to good use and surety of returns.
A representative will require you to provide legal documents pertaining to the study and operation of the business before processing your application.
In most cases, a business owner will be asked to participate in an interview with the representative with all documents present to see if you’re eligible or not. They will be using current market trends to analyze your business to see if it is worth the risk or not.
The presence of financing options by these institutions offers plenty of opportunities to invest without limitations — giving you free reign on how you want your business to operate or as a means to proceed with expansions that spells success on your end.
Business financing in small UAE is a great way to start your own venture in the Middle East without having problems with your investment.
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