Dubai’s hospitable business culture continues to attract entrepreneurs globally and is known for having a thriving expat owner business culture. A significant aspect of establishing and developing a business is deciding how to fund it. For expats chasing their entrepreneurial ambitions in this increasingly busy emirate, it is vital to understand the business loan market for expats.
The UAE’s financial market has a wealth of business loan options that cater specifically to expat entrepreneurs and business owners. Whether you are launching a new business or expanding an existing one, finding the proper financing can make or break your business journey.
Additionally, Dubai’s economy is built for foreign investment, which helps to create the substantiated availability of expat business funding. Financial institutions are aware of the impact expat owned businesses have on the local economy, and they have product offerings to help meet this market segment.
Forums for Expats
Depending on your specific circumstances, an expat business owner has access to an array of business financing options:
Term Loans
These business funding and financing options are traditional solutions for business owners. A lump sum will be made available to you for funding business purposes, and then the lender will be repaid interest over a specified term, mostly. Term loans are mostly useful for large purchases of equipment or for business expansion.
Working Capital Loans
Most commercial lending institutions offer options for business financing in the UAE for an entrepreneur to access the working capital they need to run day-to-day operations. If any commercial business operates in a seasonal environment or has weather-related ebbs and flows in cash flow, working capital loans will help ease cash flow shortages.
Trade Finance
If the business is involved in international commerce, in import/export, trade finance offers financing solutions for expats more.
Financing For Equipment
Expat entrepreneurs can choose to finance equipment, which enables them to purchase equipment that is necessary for their job roles without a large capital outflow. This financing option can provide more flexible access and process for getting up to date technology or machinery for their business.
Financing For Invoicing
Expat owners may find themselves waiting on payment for services that have already been completed. SME business loans such as invoice financing can help to provide immediate cash for collecting on outstanding invoices that businesses are owed.
Commercial Mortgage
Expat entrepreneurs that are interested in purchasing an actual property for their business may also consider the corporate loan option of a commercial mortgage. This option will have a generally lower interest rate but may require more detailed financial analysis and due diligence.
Acquiring business loans to foreign entrepreneurs can depend on meeting some eligibility standards, including:
The documents you’ll typically need to provide when applying for loans for expats opening a business include the following:
Issues Expat Business Financing
While business loans for non-residents are still available in the UAE, there will be issues as an expatriate business owner:
Higher Eligibility Criteria
The UAE banks set higher requirements for expat business financing as compared to loans for UAE citizens.
Higher Interest Rates
The loans for expatriate entrepreneurs in the UAE may attract a higher interest rate which will reflect the risk appetite of the lender.
Excessive Paperwork and Implementation
The paperwork necessary for bank loans as an expatriate can be extreme and take time to complete.
Collateral Required
Most lenders will require significant collateral to lend against a new expat business.
If you are looking to improve your chances of receiving business loans for expats you could:
Create a Good Banking Relationship
Having accounts with a reputable UAE bank and showing good banking behavior can provide and enhance your opportunities for receiving loan programs as an entrepreneur.
Create a Comprehensive Business Plan
To be approved for a fast business loan, you need a good business plan with market research, financial projections, and repayment strategy.
Enhance Your Credit Report
To access appropriate business finance options, it is essential to have a good credit history in the UAE.
Evaluate Alternative Funding Sources
If the traditional bank loan route is not successful, then other options you might explore are: venture capital, angel investors, or crowdfunding financing.
Engage with Financial Consultants
Using professionals, like Optimum Global UAE, can also assist expats with the complicated situation regarding financing for an expat business.
Funding Alternatives for Expats
If access to traditional capital in the UAE is proving not very successful, consider these alternatives for your expat business:
Venture Capital
Venture-capital firms may provide funding in exchange for equity for an innovative new business (especially when there is a possibility of high growth).
Angel Investors
Wealthy individuals sometimes provide funding for expats open a business and may also add value with mentorship and expertise.
Government Programs
The UAE government uses plenty of initiatives to support small businesses to start-up financing.
Peer-to-Peer Lending
There are online platforms that can connect a loan with an individual for loans to foreign entrepreneurs without a traditional bank.
Crowdfunding
Crowdfunding gives you the opportunity to get many small amounts of money from various investors, without going through a traditional business application process.
When you choose among the business loans, consider the following:
Financial consultants such as Optimum Global UAE play a vital role for expats in navigating traditional loans for expat business with many different possible loans for possible businesses out there such as:
Dubai continues to provide exciting opportunities for expat entrepreneurs who desire to start a business, expand an operational business, or diversify. Although securing expat business financing funding may present certain challenges, opportunities do exist regarding finance for a business.
As you review the selection of business funding alternatives and as your education of the funding process continues to expand, understanding the available options will improve your chances of success.
The opportunities present excellent potential for competitive business ventures allowing expansion for all business types. With competitive loan options available as an expat, taking the first step is most important to succeed. Therefore, as expat business owners, we ask you to review the financing opportunities and possibly reach out for assistance.
To know your options, you can contact Optimum Global UAE for more specific assistance with expat business funding. The consultants here are for you and are happy to assist you in obtaining the capital you need to accomplish your goals in a new environment.
