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Business Loans in Dubai Options Benefits and How to Apply

If you need sufficient capital to help set up your new business, you can apply to get loans for your business in Dubai. UAE is one of the best places to start a new business as there are many advantages, like tax benefits, accessible processes and policies. 

Different banks offer loans on flexible conditions and interest rates so that you can get the loan you need and pay it in a suitable time frame. If you want to grow your business in the UAE, take advantage of this opportunity as we discuss different options of business loans for new companies in the UAE and interest rates. Let us explore the types of business loans in the UAE.

 

Business Loans agreement in Dubai

Types of Loans in Dubai

In Dubai, there are different types of banks that provide business loan for New Company in UAE. Select one according to your financial need and requirements.  

Commercial Property Loans

Having an office for a business in Dubai is necessary, because this will help you run a successful business. You can get financial help from different banks by giving your assets or property as security. These banks also allow you to purchase ready-made buildings for your office.

Commercial Property Loans

Eligibility Criteria. Any self-employed or salaried person can apply for this loan. Their monthly salary should be AED 30,000

Maximum loan. You can get a maximum loan of up to AED 7 million.

Interest rates. The interest rate on this loan is about 15% to 20%.

Required Documents.

  • Application form
  • Photocopy of passport and visa
  • Emirates ID
  • Bank statement
  • Photocopy of business license
  • Proof of ownership
  • Liability letter (If any)

Home Equity Loans

Some banks also provide mortgages or loans against properties in the UAE. You can get a loan for your business by giving your residential or commercial property as a security. It is a long-term loan but very helpful for your business.

Home Equity Loans

Eligibility. All nationalities

For individuals. Salaried and Self-employed

  • Sole Establishment
  • Limited liability company.’
  • Free zone companies
  • Branches of foreign companies

Required Documents

  • Photocopy of passport and visa of owners
  • Bank statements from the last 6-12 months
  • Business License
  • Power of attorney
  • Proof of ownership 

Business Loans for Medium and Small Companies

Small Business Loans

Many options are available if you have a Small Business and need a business loan for a new company in UAE. 

Eligibility Criteria.

  • Sole properties
  • Self-employed
  • Small and medium companies

Maximum loan. You can get a loan of up to AED 50,000 up to 300,000.

Duration. The time of this loan is up to 3 years.

Interest rate. This type of Business loan interest rate in Dubai is flexible.

Traders Loan (POS)

Certain banks provide loans against point of sale (POS), which is the value of your day-to-day purchases with the help of a POS machine.

Traders Loan (POS)

Benefits.

  • No insurance fee
  • Top-up facility (after one year)

Maximum loan. You can take a loan of up to AED 5 million.

Duration. The duration is up to 4 years.

Semi Secured Business Loan

In a semi-secured loan, you can get double the amount of your mortgaged shares against your or your sponsor’s shares bank account balances. Business loan interest rates in Dubai are attractive for this category.

Maximum Loan. You can get a loan of up to AED 5 million

Duration. The duration of this loan is about five years.

Business Loans against Fixed Deposit

Getting a business loan against a fixed deposit is another option which can help you financially and grow your business in Dubai. You can get a loan of about 90% of your fixed deposit amount from banks without affecting your fixed deposit. 

Maximum Loan. For fixed deposits the limit of loan is very high.

Duration. The time of this loan is up to 4 years.

Commercial Automobiles Loans

This type of loan is given to companies needing loans for their commercial automobiles. The Automobiles include trucks, heavy buses pickup etc.

Commercial Automobiles Loans

Eligibility

Required Documents

  • Audited financials
  • Bank statement for the last six months
  • Photocopy of passports and visas
  • Details of the company’s automobiles
  • Power of attorney
  • Business License

Car Finance

In UAE, a car company can apply for loans in order to get new cars or replace old cars for their car business. 

Car Finance

Benefits. The time of this loan is up to 5 years. 

Required Documents.

  • Business License
  • Power of attorney
  • Bank statement for the last six months

Construction Machinery Loans

If a construction company needs a business loan for a new company in the UAE or wants to replace its current machinery, many options are available.

Maximum loan. Loans of up to AED 5 million

Duration. Three years

Business Loans without Collateral

There are several banks offering business loans in Dubai without collateral. You need not keep your company’s or personal assets as security to get a loan. You can pay off this debt in a given period or with monthly installments. 

Islamic Financing in the UAE

Different banks in the UAE offer Islamic financing and investment complying with the Shariah Law. The fundamentals of Islamic banking are,

  • Interest rates are forbidden on lending or borrowing money
  • The earned money must be from lawful trade and investments

Difference Between Traditional & Islamic Finance

There is no interest rate in Sharia Law. Due to this, Islamic finance has the concept of profit and loss under the agreement. In some contracts, the profit and loss shares for investors and entrepreneurs are specified. In addition to that, the investor will have to bear all losses.

In traditional finance, there is a business loan interest rate in Dubai on every type of loan, even if the company is big or small. 

Comparing Different Loan Providers in UAE

Here is a comparison between different banks that provide business loan for new company in UAE.

Provider Minimum Revenue Monthly Payment Max Term
Emirates Money Equipment Loan AED 360,000 AED 11,389 4
Aseel Business Finance AED 900,000 AED 13,064 4
Dubai Islamic Bank  AED 1,000,000 AED 12,531 4
Gulf Finance Small Business Loans AED 2,500,000 AED 12,930 4
Emirates Islamic AED 150,000 AED 12,206 4

 

Bottom Line

All in all, there are different options for banks offering business loans in Dubai. Considering all the risks involved when taking out a business loan would be best. Selecting the right bank that offers loans with minimum or no interest rates can be fruitful for your company. 

If you need information regarding banks that offer business loans in Dubai without collateral or have low business loan interest rates, contact Al-Riyady. Our expert team is here to help you through this procedure. Our services include Tax Consultation, Accounting, Auditing and more.

FAQs

The minimum interest rate is between 17% and 24% in the UAE. You can select the right option according to your business requirements.

Individuals above the age of 21 can apply for business loans, while for companies, it is mandatory to be operational for 1-2 years in the UAE.

The top five banks for business loans are.

  • RAK Bank
  • Mashreq Bank
  • Emirates NBD
  • ADCB
  • Standard Chartered

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