Business Loans in Dubai: Eligibility, Documents & Best Banks

Dubai, the glamorous emirate of the UAE, is popular for its iconic skyscrapers and is not only a favored business destination for business owners and investors in the Gulf but also worldwide. The modern infrastructure, strong economy, and investor-friendly rules are some of the reasons that attract global investors to invest in this stunning emirate. Moreover, businesses can secure business loans in Dubai with better interest rates, flexible payment plans, and other benefits. 

Whether you are a small startup owner or run an established company, you can easily get a bank loan in Dubai and expand your operations or invest in new opportunities. Are you looking for funding from a reliable bank for your Dubai business? Continue reading this blog to find out about the best banks for getting business loans, eligibility, and document requirements for it. 

What are Business Loans in Dubai?

Business loans are financial products offered by banks that provide funding support for different business needs, like expansion or investing in new opportunities. Both startups and large businesses can apply for a business bank loan in Dubai, and the loan amount, interest rate, and repayment plans differ from bank to bank. Some common types of business loans are equipment financing, startup business loans, SBA-backed loans, Islamic business finance, etc. 

Business loans in Dubai: Eligibility Criteria

If you want to apply for a loan for business in Dubai, you must fulfil some basic requirements set by banks. Here are some common requirements set by almost all banks in the emirate to confirm an applicant’s eligibility for a business loan- 

1. Operational Period- Most banks in Dubai offer business loans to businesses that have been actively operating in the emirate for at least 1 or 2 years. If your business operation period is longer than this, your chances of getting a loan increase.
 

2. Minimum Annual Turnover- Banks check whether the minimum annual sales turnover of the business meets the eligibility limit. Mostly, it is around AED 1 million, but for small loans, the required turnover limit can be lower. 

3. Corporate Bank Account- If you want to get a business bank loan in Dubai, you must have an active corporate bank account with a positive transaction history, as the bank will disburse the loan amount into the same account. 

4. Age & Legal Structure- To be an eligible applicant for a business loan in UAE, you must be above 21. Additionally, your business must be legally registered and must have a valid business license. 

5. Financial History- Before a bank lends you a business loan, your financial records will be checked, including bank statements for the past 6-12 months, to confirm your ability to repay the loan. Additionally, clear financials and no history of defaults increase the chance of loan approvals. 

Business Loans in Dubai: Required Documents

To apply for a business loan in Dubai, applicants need to provide some requested documents to the banks that help them understand their business profile and assess eligibility. Here are the commonly required documents:

• Trade License- A copy of a valid trade license confirming your business is legally registered and actively operating in the emirate. 
• Emirates ID & Passport Copy- The applicant needs to submit a copy of the passport and Emirates ID as identification and residency proof.
• Corporate Bank Statements- The bank requests the corporate bank statements of the last 6-12 months from the applicant to review the business’s income, expenses, and cash flow. 
• MOA- This is needed by the bank to assess the business’s legal and ownership structure, and it is especially important for companies with multiple owners and shareholders.
• VAT Registration (If Applicable)– If your business is VAT registered, the bank will ask for a copy of your VAT certificate.
• Other Documents- Partnership agreement, AOA, Ejari contract, employee list, audit reports, etc., are some other documents requested by banks for a loan for business in Dubai.

Best Banks for Business Loans in Dubai

Many banks in Dubai offer good interest rates and flexible repayment plans for business loans. Here are the 5 best options that you can consider to get a business loan in UAE–

1. Emirates NBD- Not only in Dubai, but across the UAE, this bank is a top choice for business loans. It is one of the largest banks in the country, and offers both secured and unsecured loans with flexible repayment plans and digital banking services. 

2. Abu Dhabi Commercial Bank- ABCD is another good option for business loans in Dubai, and is particularly chosen by tech startups and other businesses seeking digital solutions. This bank offers competitive business loans for SMEs with customized security and repayment plans.

3. Mashreq Bank- This bank offers customized loans for businesses of all sizes, and is opted for by many business owners because of its fast processing and strong customer support services. 

4. RAKBANK- This bank is a popular option to get a business bank loan in Dubai among small and medium businesses, as it offers competitive interest rates and fewer document requirements.

5. Dubai Islamic Bank- This is the best option for Sharia-compliant businesses that are looking for interest-free loan structures, as its loan option follows Islamic banking principles.

Business Loans in Dubai: Steps to Apply

Applying for a loan for business in Dubai involves a simple process, and with the right preparation, you can easily navigate it. Here are the main steps in this process- 

1. Evaluate Your Business Needs- Firstly, you need to determine the amount of funding you need for your business, which requires understanding the purpose for which the loan is being applied, like working capital and equipment purchase. 

2. Research Lenders & Loan Products- Secondly, you must research different banks to compare their interest rates, repayment plans, and loan terms, which will help you make the right decision. 

3. Check Your Eligibility- Next, you need to check the requirements of various banks to see whether you and your business are eligible to get a business loan in Dubai. 

4. Prepare Documents- Now, you need to prepare the required documents, like a completed bank application form, a valid trade license, company registration documents, bank statements, etc., to move forward with the next step. 

5. Submit the Application Form- Next, you need to submit the application form, together with the prepared documents, to the selected bank. Before submitting the application form, make sure all the details filled in are correct, and you’ve presented a compelling case for why you need a business bank loan in Dubai.

6. Wait for Approval & Loan Offer- After reviewing your application for a loan for business in Dubai, the bank will share with you the loan offer. Before signing the agreement, you must review the loan terms, like interest rate, repayment schedule, loan duration, etc. 

7. Sign Agreement and Receive Funds- Once you are done with the loan offer review, sign the agreement, after which the requested loan amount will be disbursed to your corporate bank account. 

Conclusion 

Applying for business loans in Dubai is a great option for business owners who want to expand their company and invest in new opportunities. However, it is important to choose the right bank and loan type based on your needs and finances to avoid extra pressure.

Connect with Arabian Wingz, the most trusted business management consultant in Dubai, to get expert support throughout the entire business loan application process. Our team will help you with choosing the right bank, reviewing multiple loan types, handling paperwork, and other steps to make funding simple and easier for you.