Business Financing In Small Uae
United Arab Emirates, also known as the UAE, is alike other parts of the world as far as the business activities are concerned and this is the reason why one finds many small business enterprises in this part of world. The small business sector constitutes a major part of the whole business sector in terms of turnover, earnings as well as the employment. The government of UAE is fully apprised of all these facts and thats why there are so many financial institutions and other government departments that provide financial aid to the various small business enterprises in UAE. Let us discuss more about it in our next part of discussion.
Small Business Finance In UAE:
As far as the small business finance in UAE is concerned, there are so many financial institutes like banks etc that provide the financial support to the various small business enterprises. These loans are provided for the start up as well as the expansion of the small business units to the small business entrepreneurs. Apart from the financial aid from banks and other non-banking financial institutions, the small businessperson also gets aid in the form of venture capital and the angel investors too. It is to be noted here that the women entrepreneurs are given great preference in providing these loans and other type of credit facilities.
For the last ten years or so, the total number of small business women entrepreneurs has shown a very good rise owing to the various policies of the government of UAE and now, these women owned small business enterprises are competing with that of men. The various fields in which the loans and other credit facilities that are readily available to the small business women entrepreneurs either to start up or expand their business unites include catering, pet supplies photography, greeting cards, record labels, brokerage business, craft businesses etc. Thus, a woman in the UAE can easily go for starting up her own small business enterprise in the orthodox traditional field as well as the modern field.
Apart from this, the capital finance is also available to the various women entrepreneurs in the field of small business. It has also been noticed that women now a day in UAE are leaving their traditional style of handling business and are easily resorting to the modern styles.
This different outlook women entrepreneur has definitely provided them an edge over men. The women in UAE are now allowed to take loans for as much as $250000 or even more. Let us now see the various sources of finance in the UAE for the small business entrepreneurs to start up or expand their own small business units for both, men and women.
Sources of Finance in UAE:
As far as the sources of finance are concerned, there are all types of sources available here for providing the financial support to the small business enterprises. The traditional sources include assistance from the friends and relatives and the capital invested by the entrepreneur himself. Apart from the above sources, the other ways of getting small business assistance in UAE are:
Loans: This includes all types of loans that are being provided by the various financial institutions including banks etc. The first type of loan that a small business entrepreneur in UAE can avail is the term loan.
The term loans are given for the purpose of acquiring the fixed assets like the equipment, machinery etc that has to be used in the business processes. If a person wishes to purchase real estate in UAE for the purpose of the start up or the expansion of the business enterprise, term loans are also available for this purpose. These loans are given for a fixed term and have to be repaid within that period. The length of the repayment period varies from one institution from another but it has been observed generally that the maximum period allowed for repaying these types of loans are 20-25 years. Apart from the term loans, there is also working capital finance available to the various small business enterprises. This type of advance is given for financing the day today needs and bridging the gap between the payments and receipts. It can also be utilized for the purchase of inventory and for carrying out business processes. Bank guarantees, letter of credits and the various types of lines of credit are also other important sources of finance for the small business enterprises. Apart from all of the above, there is also angel or the private investors in UAE that make a source of finance for the small business enterprises. It is also to be noted here that these investors are required to be convinced fully before they agree to make investments in the various small business projects.
A small businessperson should approach these type of investors only when he is fully satisfied that the proposed project would be able to make good profits for itself as well as the investor. The venture capital also forms another source of finance for the small business enterprise. There are many foreign investors that are now coming forward to invest in the different types of business enterprises in UAE. There are also grants that are available for the small business enterprises from the government of UAE. The women etc are of course given preference in providing the grants for the development of the small business enterprises. Thus it can be easily said that there are many sources of small business finance in the UAE.
Summing up
If a person wishes to start up or expand his own small business unit in United Arab Emirates, there are ample sources of finance that are available for him. There are domestic as well as foreign banks that provide different types of credit facilities to the business units. Angel investors and the venture capital funds also form an important source of funds. Since the start of last decade, the small business sector in UAE is showing very good signs of growth and this is the reason that the prospects of small business enterprises in this part of world look very encouraging and thus, it seems quite certain that in the coming years, the sources of funds for the small business enterprise would definitely grow. Some of the names of important financial institutions that provide financial assistance to the small business sector in UAE include Mashreqbank, Global Entrepreneur Monitor etc.
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