Are you wondering if getting a business loan without a bank statement in UAE is possible? Let us find out more in this article. We will also explore the other essentials of getting a business loan.
Is it possible to get a business loan without a bank statement in the UAE?
Banks look at multiple factors while giving out loans to businesses in the UAE. While some look out for your credit score, others will need you to have collaterals while some require essential documents to obtain a business loan.
One such document is a bank statement. All banks in the UAE require you to share your bank statement in order to get a business loan. This can be your personal or business bank statement. The period of the bank statement may differ from bank to bank. The average bank statement required ranges from 6-12 months.
But there are some alternatives to getting a business loan without having a bank statement. Let us explore some of the exceptions to the general rule requiring bank statements.
Ways to get a business loan without a bank statement
There are different initiatives started to promote SMEs and help in the growth of business. These organizations do not require bank statements for giving out loans but have other stringent requirements.
You need to apply for membership to the Khalifa Fund, to be eligible to apply for a loan from this institution. The documents required for membership are:
- Emirates ID, Family Book, Introductory Statement, Passport, Passport Photos, Trade Licence, & Trade Name Reservation Certificate.
The fee for a license less than 2 years is 500 AED and for those greater than 2 years is 2000 AED.
2. Mohammed Bin Rashid Fund
The Fund was established with the goal to fund SMEs to encourage innovative ideas. The documents required are
- A copy of the passport, A copy of the Family Book, a Detailed resume, an Establishment program model, and an Executive Summary/Action Plan for the project.
They offer funding loans and Bank Guarantee loans to eligible small and medium-scale enterprises.
3. Islamic Financing – Mudarabah or Mudaraba
These are some rare exceptions to the general rule of requiring Bank Statements for all business loans.
Other ways to get Business Loans
If you do not qualify for the above methods, you can also look to get funding without bank statements through-
- Crowdfunding
- Private investors
FAQs
1. Why do banks require a bank statement to process a business loan in the UAE?
Bank statements are tools used to verify the credibility of loanees. They help banks determine the following:
- The loanee’s income and activities.
- Whether or not the loanee will be able to pay back the loan
- If the loanee has existing loans.
2. What should this bank statement comprise?
A bank statement should comprise, all information about the business/ Loanee’s personal bank accounts and financial activities. These could be debit and credit transactions. The period of the bank statement may differ from bank to bank. The average bank statement required ranges from 6-12 months.
3. Can I get a business loan without income proof?
No, proof of income is required for you to get a business loan.
4. How will I know if I am eligible for a business loan in the UAE?
You can apply for a business loan in the UAE if:
- You are over 21 years of age.
- Your business has been operating for over 1-2 years
- You are meeting the minimum Annual turnover required as per the Bank you are applying to for the loan
- You have personal or business bank statements for the past 6-12 months
- You own a business account in at least one bank in the UAE
5. What are the basic documents I will require to secure a business loan in the UAE?
The basic documents you will require to secure a business loan in the UAE is:
- Bank statements for the past 6-12 months
- A copy of the borrower’s passport
- A completed application form for a business loan from the Bank you are applying to.
- A Memorandum of association (MOA), Power of Attorney & a Partnership Agreement
- The original and a copy of your trade license.
Takeaway
Business loans are extremely tough and unlikely to be disbursed without a bank statement. Very limited situations as listed above will qualify you for such a loan.
