What is SME Loan?
SME loans are specialized financing solutions tailored to the specific needs of small and medium-sized businesses. These loans offer SMEs the opportunity to secure the capital they require to fund various aspects of their business, such as purchasing equipment, expanding operations, or even managing working capital needs.
Benefits for SME Laon
- Easy Financing Options:
SME loans can be a good option when your business requires funds. SME business loans don’t take a long time and can be approved easily, making them a great option when your business needs quick financial support.
- Less Documentation
Unlike traditional loans that require extensive paperwork, SME loans in Dubai are easier to apply for, needing only basic documents. This simplicity makes them an attractive choice for businesses.
- No Collateral Required
One major advantage of SME loans is that they don’t require collateral. Unlike other loans that may demand property or assets as security, SME loans allow small businesses to secure funding without risking their property.
- Flexible Repayments Options
SME Loans in Dubai Offer Flexible repayment option. Banks offer you the flexibility of repaying your loans within 60 months (but it varies from bank to bank). This Flexibility helps ease the pressure on small businesses.
Type of SME Business Loan
- Business Loan
A business loan is a type of financing provided by banks or other financial institutions to businesses, which they can use for various purposes such as expanding operations, purchasing equipment, or managing cash flow. The loan amount is typically repaid with interest over a set period.
- Pos Loan
A Point of Sale (POS) loan is a type of financing that allows SMEs to borrow money based on their sales transactions processed through a POS system. It makes them a flexible option for businesses with fluctuating revenues.
- Asset Based Finance
Asset-based finance is a type of loan or credit that is secured by a business’s assets, such as inventory, accounts receivable, machinery, or real estate. If the business can’t repay the loan, the lender can take these assets to recover the money. This type of financing is often used by businesses to get cash quickly, especially when they have valuable assets but need more working capital.
- Goods Murabaha
Goods Murabaha is a financing arrangement where the buyer, who lacks the necessary funds, provides an invoice to the bank. The bank then pays the seller on the buyer’s behalf, and the buyer repays the bank in installments over 3-4 months.
Documents Required for Business Loan Application
- Completed bank application form
- Valid Trade License copy.
- MOA with all amendments
- A Copy of a valid passport, visa, and Emirates ID for all partners.
- Company Bank statements from the last 6 to 12 months
- VAT statements for the last 4 quarters.
- Commercial tenancy contract/ Ejari
- Electricity bill or Telecom bill for the last 02 months.
- Few Sales/ Purchase invoices
- Last 02 years audited financials for high loan amount.
- Assignment letter (only if applicable for cases with POS assignment)