Business loans in Dubai have become increasingly essential as the number of small and medium-sized companies in the UAE reached 557,000 by mid-2022, with expectations that this number will jump to one million by 2030. Small and medium enterprises play a major role in building a sustainable economy. They work to develop and enhance national talent, attract investment, and promote the country’s trade and brands beyond its borders
The momentum and influence of SMEs was evident at Expo 2020 Dubai, with these companies being awarded contracts worth AED 6.8 billion , representing more than a quarter of the total contracts awarded. Currently, SMEs contribute 63.5% of non-oil GDP.
The UAE has a group of business incubators, a favorable tax environment, a world-class airport that serves as a regional hub, and one of the busiest ports in the region, which means that the country has a strong mix of infrastructure and distinguished aviation services, enabling it to launch and expand businesses globally.
However, reaching further areas – specifically global markets – also requires financing, and in this sense, about 80% of startups in the UAE were created with personal funds, but there is still a need for more financing options to expand the scope of startups.
Fortunately, there is a growing range of options to enhance financing for SMEs for start up business loans in Dubai, and here are some notable initiatives:
The Mohammed bin Rashid Establishment for Small and Medium Enterprises Development is the first and main entity that supports the growth of these companies in the UAE.
The branches of this organization support a variety of successful local companies, such as Falcon Coffee Roasters, the e-commerce platform ( Pacman ), and Al-Musanada Drones , one of the largest drone stores in the Middle East, and these are just a few examples of success stories.
Initiatives such as the Top 100 SMEs’ 100 Program highlight the best-performing SMEs and provide capacity building, training with international partners and advisory services to develop their businesses.
Regarding financing:
The Mohammed bin Rashid Establishment for Small and Medium Enterprises Development offers interest-free start-up loans of up to AED 1 million to cover the costs of startups owned and managed in the UAE, with a repayment period of up to five years, as well as an additional grace period of up to 24 months.
How to get business loans in Dubai:
If your SME has come a long way in its business, there are still other options, the first is the loan guarantee program from the Mohammed bin Rashid Establishment for Small and Medium Enterprises Development, you can request a loan from selected banks in the UAE and get a 100% capital guarantee. The value of the loans ranges from one million dirhams to 3 million dirhams, and they are characterized by low interest rates and allow grace periods to repay the loan to help cover costs and achieve profits, but there are 3 conditions for your company to be eligible for this program:
- To be fully owned and managed by UAE nationals.
- Based in Dubai.
- Owned by a person between the ages of 21 and 65 years.
Dubai Global Growth Initiative:
In January 2024, Dubai Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum announced a Dh500 million initiative for SMEs established in Dubai and looking to expand globally. Unlike the Mohammed bin Rashid Establishment for Small and Medium Enterprises Development, this initiative is open to all SMEs based in Dubai, even companies not owned by UAE nationals. As part of this initiative, Emirates NBD provides financing to SMEs at competitive interest rates, with financing priority given to strategic sectors. Likewise, the Khalifa Fund for Enterprise Development offers interest-free medium-term loans of up to AED 2 million , specifically for Emirati entrepreneurs.
Mohammed bin Rashid Innovation Fund for startup business loans in Dubai:
SMEs can also benefit from the Mohammed bin Rashid Innovation Fund, as its guarantee program provides government-backed credit guarantees to encourage financing from commercial banks. The Innovation Fund provides a range of other services, such as business model support, guidance and guidance on entering new markets, and other types of capacity building and unlocking potential.In addition, SME owners retain full ownership during expansion, because the fund does not seek an ownership stake.
Credit guarantees from the Emirates Development Bank:
The Emirates Development Bank took the lead in providing credit guarantees to support SMEs as part of the allocation of 30 billion dirhams to strategic sectors, as in the following examples:
The Emirates Development Bank announced a guarantee of up to 50% of the facilities provided to finance small and medium-sized companies by Abu Dhabi Commercial Bank.
Business loans in Dubai are supported by Ajman Bank, which provides financing of up to 10 million dirhams to small and medium-sized companies, with a guarantee of 50% of the facilities or co-financing by the Emirates Development Bank. Additionally, Ajman Bank offers up to one million dirhams to startup companies in the Emirates, with a guarantee of 60% or co-financing by the Emirates Development Bank. The Emirates Development Bank also provides guarantees of up to 50% of the facilities that Emirates NBD lends to SMEs, with a maximum of 5 million dirhams for larger SMEs and up to 500 thousand dirhams for smaller companies
Other SME loan programs:
Other banks in the UAE offer a range of lending programs for SMEs, such as the Small Business Loan Program from Mashreq Bank , or the SME Business Development Loan from First Abu Dhabi Bank , which offers three-month working capital facilities and long-term loans for up to four years.
Conclusion
In conclusion, securing a startup business loan in Dubai through the Mohammed bin Rashid Establishment for Small and Medium Enterprises can add a touch financial support for your small and large business startups. So pro services In Dubai offer top-notch consultancy with exclusive perks like low interest rates, and flexible repayment options helping you get success in the competitive market of Dubai.
