Becoming
a self-employed businessman is a great reputation in the society but the
problems faced by the entrepreneurs from the day one of their business is
enormous. It is a great challenge for a person to overcome all obstacles to
become a successful businessman. The numerous problem faced by all is finance.
Even great entrepreneurs of various industries have struggled a lot of
financial crisis for setting up their business and to run their daily business
operations.
Introduction:
There are various sources for business people to raise capital for their business. The most trusted source is from banks. There are various reasons why people choose banks as the best source for raising capital for their business. Banks provide a lower cost of funds in the form of best business loans in UAE. There are various types of business loans at differential interest rates to facilitate business people to solve their financial crises.
Types of Business Loans:
Businesses are of different types and need finance at different stages of their business operations. The need also being different, banks help them in providing different types of business loans helping various small and medium enterprises to raise capital.
New Project Loan - Banks are interested in funding for new businesses and also for new projects of existing business. There are various criteria for getting new project loan and differs from bank to bank. Project loans are approved against the collateral of the person like residential property, commercial property or empty land.
Top-up on Existing Loans - These loans are issued for expansion, replacement, diversification of an existing business. These loans are approved for short term or long term basis to buy goods, machinery or any fixed assets for the company.
Working Capital Loans -These loans are provided for the business to solve sudden financial crises and repaid within short durations. Banks are more interested in providing working capital loans against their inventories, stocks or receivable bills of the company.
Secured Business Loan - Business loans in which companies raise their capital against any security for the bank. It may include plot, residential or commercial places, gold, shares, bills, insurance as collateral to get funds for their business. The interest rate is preferably less.
Unsecured Business Loan - Every businessman cannot afford to pledge a security in getting the business loan, so bankers help them with loans without any security based on bank transactions and income tax returns. These loans are charged with more interest rates when compared to secured business loans in Dubai.
Requirements of the Banks:
There are various steps and procedures followed by banks to provide funds. The procedure and documents to be submitted to the banks as follows
Identity and address proof of the company - Address proof and identity proof of partnership or proprietor business.
Financial statement of the company - Every bank is interested in seeing the recent 1-year business transaction of the company.
Income tax returns - ITR helps the bankers to check the business performance, efficiency level, assets and liabilities of the company and also tax that company pays from their current earnings. This also plays a major role in deciding the loan amount for the business people.
Financial Security - It includes the fixed and movable assets of the company which helps the banker to consider providing business loans based on the asset value along with the business transactions. This also safeguards banks from the failure of businessmen that fail to repay the loan amount.
Previous Loan track - This is a very important factor considered by banks which will help them evaluate the financial condition of the business and also to check on past repayments on loans.
Litigation - It will help banks assess the character of businessmen before providing a business loan.
Takeaway:
Though business loans in UAE are found to be a great source for raising capital, businessmen undergo challenge in getting timely funds from the banks. In order to help them in availing timely loans, even NBFC is also now prepared to help them with funds at various stages of their business. Banks & NBFC have also made the lending process easy, with all verification done in shorter time-span, doorstep assistance in collecting documents etc. Businesses with good cash flows & credit score can avail timely funds with much ease.
Introduction:
There are various sources for business people to raise capital for their business. The most trusted source is from banks. There are various reasons why people choose banks as the best source for raising capital for their business. Banks provide a lower cost of funds in the form of best business loans in UAE. There are various types of business loans at differential interest rates to facilitate business people to solve their financial crises.
Types of Business Loans:
Businesses are of different types and need finance at different stages of their business operations. The need also being different, banks help them in providing different types of business loans helping various small and medium enterprises to raise capital.
New Project Loan - Banks are interested in funding for new businesses and also for new projects of existing business. There are various criteria for getting new project loan and differs from bank to bank. Project loans are approved against the collateral of the person like residential property, commercial property or empty land.
Top-up on Existing Loans - These loans are issued for expansion, replacement, diversification of an existing business. These loans are approved for short term or long term basis to buy goods, machinery or any fixed assets for the company.
Working Capital Loans -These loans are provided for the business to solve sudden financial crises and repaid within short durations. Banks are more interested in providing working capital loans against their inventories, stocks or receivable bills of the company.
Secured Business Loan - Business loans in which companies raise their capital against any security for the bank. It may include plot, residential or commercial places, gold, shares, bills, insurance as collateral to get funds for their business. The interest rate is preferably less.
Unsecured Business Loan - Every businessman cannot afford to pledge a security in getting the business loan, so bankers help them with loans without any security based on bank transactions and income tax returns. These loans are charged with more interest rates when compared to secured business loans in Dubai.
Requirements of the Banks:
There are various steps and procedures followed by banks to provide funds. The procedure and documents to be submitted to the banks as follows
Identity and address proof of the company - Address proof and identity proof of partnership or proprietor business.
Financial statement of the company - Every bank is interested in seeing the recent 1-year business transaction of the company.
Income tax returns - ITR helps the bankers to check the business performance, efficiency level, assets and liabilities of the company and also tax that company pays from their current earnings. This also plays a major role in deciding the loan amount for the business people.
Financial Security - It includes the fixed and movable assets of the company which helps the banker to consider providing business loans based on the asset value along with the business transactions. This also safeguards banks from the failure of businessmen that fail to repay the loan amount.
Previous Loan track - This is a very important factor considered by banks which will help them evaluate the financial condition of the business and also to check on past repayments on loans.
Litigation - It will help banks assess the character of businessmen before providing a business loan.
Takeaway:
Though business loans in UAE are found to be a great source for raising capital, businessmen undergo challenge in getting timely funds from the banks. In order to help them in availing timely loans, even NBFC is also now prepared to help them with funds at various stages of their business. Banks & NBFC have also made the lending process easy, with all verification done in shorter time-span, doorstep assistance in collecting documents etc. Businesses with good cash flows & credit score can avail timely funds with much ease.
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