Business Loan in Dubai, UAE

Business Loans Interest Rates in UAE

Minimum Salary

Interest Rate

Loan Amount

Reducing Rate

RAKBANK Point of Sales Finance

Maximum Loan

AED 3000000

Min Annual Turnover

AED 300000

Time In Business

12 Months

Tenure

60 Months

AED 3000000

Maximum Loan

60 Month

Tenure

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Dubai First SME Business Loan

Interest Rate

18%

Flat Rate

9.92%

Reducing Rate

18%

Minimum Loan

AED 25000

Maximum Loan

AED 500000

Min Annual Turnover

AED 900000

Time In Business

12 Months

Tenure

48 Months

Approval Time

5 Days

Processing Fee

2%

Early Settlement Fee

5%

18%

Interest Rate

9.92%

Flat Rate

AED 500000

Maximum Loan

48 Month

Tenure

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RAKBANK Commercial Real Estate Loan

Minimum Loan

AED 10000000

Maximum Loan

AED 10000000

AED 10000000

Maximum Loan

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CBD Cheque Discounting Finance

Interest Rate

11%

Flat Rate

6.06%

Reducing Rate

11%

Minimum Loan

AED 100000

Maximum Loan

AED 3000000

Min Annual Turnover

AED 2000000

Max Annual Turnover

AED 40000000

Time In Business

24 Months

Tenure

0.33 Months

Approval Time

5 Days

Processing Fee

2%

Early Settlement Fee

1.5%

11%

Interest Rate

6.06%

Flat Rate

AED 3000000

Maximum Loan

0.33 Month

Tenure

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Aseel Business Finance

Interest Rate

21%

Flat Rate

11.58%

Reducing Rate

21%

Minimum Loan

AED 100000

Maximum Loan

AED 2500000

Min Annual Turnover

AED 900000

Time In Business

24 Months

Tenure

60 Months

Approval Time

2 Days

Processing Fee

2%

21%

Interest Rate

11.58%

Flat Rate

AED 2500000

Maximum Loan

60 Month

Tenure

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ADCB Business Insta Loan

Interest Rate

17%

Flat Rate

9.37%

Reducing Rate

17%

Minimum Loan

AED 50000

Maximum Loan

AED 2000000

Min Annual Turnover

AED 1000000

Max Annual Turnover

AED 150000000

Time In Business

24 Months

Tenure

36 Months

Approval Time

7 Days

Processing Fee

2%

Early Settlement Fee

5%

17%

Interest Rate

9.37%

Flat Rate

AED 2000000

Maximum Loan

36 Month

Tenure

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Noor Bank Business Finance

Interest Rate

18%

Flat Rate

9.92%

Reducing Rate

18%

Minimum Loan

AED 50000

Maximum Loan

AED 3000000

Min Annual Turnover

AED 2000000

Max Annual Turnover

AED 50000000

Time In Business

24 Months

Tenure

48 Months

Approval Time

7 Days

Processing Fee

2%

Early Settlement Fee

AED 0

18%

Interest Rate

9.92%

Flat Rate

AED 3000000

Maximum Loan

48 Month

Tenure

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RAKBANK RAKfinance Loan

Maximum Loan

AED 3000000

Min Annual Turnover

AED 300000

Time In Business

6 Months

Tenure

60 Months

AED 3000000

Maximum Loan

60 Month

Tenure

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CBD CAPEX Finance

Interest Rate

12%

Flat Rate

6.62%

Reducing Rate

12%

Minimum Loan

AED 100000

Maximum Loan

AED 3000000

Min Annual Turnover

AED 2000000

Max Annual Turnover

AED 40000000

Time In Business

24 Months

Tenure

36 Months

Approval Time

5 Days

Processing Fee

1.5%

Early Settlement Fee

1.5%

12%

Interest Rate

6.62%

Flat Rate

AED 3000000

Maximum Loan

36 Month

Tenure

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Emirates Money Property Power

Interest Rate

7%

Flat Rate

3.86%

Reducing Rate

7%

Minimum Loan

AED 500000

Maximum Loan

AED 7000000

Min Annual Turnover

AED 240000

Tenure

180 Months

Approval Time

3 Days

Processing Fee

1%

Early Settlement Fee

2%

7%

Interest Rate

3.86%

Flat Rate

AED 7000000

Maximum Loan

180 Month

Tenure

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What is a Business Loan?

In today’s times, businesses have the constant need to be at the top of their game. Whether it is adopting a new technology, mergers, acquisitions or opening the gates for imports and exports, they need to have it all. This has led to a regular need of funds at the disposal of the business owners

UAE, which ranks among the top 30 countries in the World Bank’s Report on the ease of doing business, recognized this need and offers business loans to customers to help them meet their business requirements. There are many banks and financial institutions offering business finance today.

A business loan is usually an unsecured loan provided to businesses to meet their small financial needs. The loan must be paid back in instalments with interest over the agreed tenure.

Features of a Business Loan

As a business owner, you must be careful in choosing a business finance provider. Here is a look at some salient features of business loans in UAE:

  • Most banks do not require a security against the loan. However, you must check with the bank before applying.
  • Customers having a current account are usually offered preferential rates and other benefits when they apply for home loans.
  • Some banks offer top-up or loan extension facility if you meet their requirements.
  • Business loans under the Shariah laws of Islamic Banking are also available in UAE.
  • Some banks offer free credit cards and insurance cover along with the business loan.
  • The loan amount usually varies from AED 100,000 to AED 2 million.
  • Many banks put in a lot of effort to ensure that you have seamless experience. Relationship Managers are assigned to majority business loan customers for query handling.
  • Some banks may set a minimum balance requirement to offer business loans.
  • You have an option to choose between flat and reducing interest rates.

How can I use the Business Loan?

Business owners have a constant requirement of finance for some or most of these reasons:

  • Working capital
  • Expansion of operations
  • Inventory purchase
  • Launching a sister/support company
  • Logistics
  • Mergers
  • Acquisitions

Regardless of the reason behind applying for a business loan, most banks in UAE are welcoming the possibility of a mutually beneficial borrower-lender partnership with business owners.

Eligibility for Business Loan in UAE

Every bank has its own eligibility criteria which needs to be checked individually. However, some basic requirements are as follows:

  • The business should be at least 1 year in operation.
  • Minimum annual turnover upwards of AED 1 million
  • Entities eligible to apply for a business loan usually are:
  • Limited Liability Company (LLC)
  • Sole Proprietorship
  • Partnership
  • Free Zone companies
  • Branches/Subsidiaries of offshore organizations

Documents required for Business Loan in UAE

As is the case with eligibility, every bank can have its own requirement of documents to process your loan application. Apart from the application form, some basic documents needed are:

  • Memorandum and articles of association / Partnership agreement / Power of Attorney (POA)
  • Passport copy
  • Copy of the trade license
  • Bank statements

If you already have an account with the bank, then the number of documents needed might reduce. Please ensure that you arrange all the documents before submitting your application.

Business Loan Fees and Charges

There are different kinds of fees and charges associated with business loans and they can vary with each bank. These may include an arrangement fee which usually is a small percentage of the loan amount, processing fees of around 1.2-2% and early settlement fee of around 1% of the outstanding amount. While most of these charges would be standard across banks, it would be in your best interest to go through the detailed schedule of charges thoroughly before applying.

Business Loans offered by majority banks

Banks are slowly recognizing the need for business loans in the market and are continuously improving their products. Some leading banks offering business loans are:

  • Mashreq Bank – Small business loan
  • Abu Dhabi Islamic Bank – business finance
  • RAKBANK - finance
  • Dubai Islamic Bank – business finance

Remember, a business loan can go a long way in expanding and improving your current business. However, ensure that you research well as this will be a long-term financial association and you wouldn’t want to find yourself at the shorter end of the stick. Consult a business/financial advisor, if need be.

FAQ’s

Q. What is LOB?

A. LOB is an abbreviation for Length of Business. Every bank has a specific requirement about the time for which the trade license is functional. The authorized signatory, as evidenced by the Memorandum of Articles, should be at least one year in business (can vary from bank to bank). It is advisable to talk to your bank to get a better understanding of the same.

Q. Can I do partial payment of my loan?

A. The answer to this question depends on the bank through which you have availed the loan. Usually, banks dissuade partial payments of business loans. However, you may talk to your bank regarding the same.

Q. My bank is asking for a collateral for a Business Loan?

A. While majority banks provide business loans with collaterals, some banks may choose to demand the same. You may approach other banks with no such conditions. Remember, to check all terms and conditions and schedule of charges before signing the dotted line.

Q. What is flat and reducing rate of interest?

A. Here is an explanation for both the rates:

Flat rate of interest: Interest is charged on the amount borrowed at the agreed rate of interest throughout the tenure of the loan.

Reducing rate of interest: In these loans, the first instalment is charged on the entire amount and from there the principal component keeps reducing and so does the interest.