Dubai offers Financing Options For Small Business.Having a great vision for your business is really very important but along with that capital is also required. Securing funds for a startup is a major challenge for entrepreneurs. The business environment of Dubai attracts entrepreneurs from various parts of the world.
Because of its strategic location, the setup company in Dubai is a popular choice. Government policies to promote business, a favorable tax system, and favorable visa regulations are the main aspects that create the best business environment in Dubai. In Dubai, funds for your business can be secured from various government and local funding programs. This post will help you in choosing a funding source to secure capital for your business startup.
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The List Of Top 5 Best Financing Options For Small Businesses In Dubai
1. Crowd Funding
In Dubai, crowdfunding is a very popular Financing Options For Small Businesses In Dubai by collecting contributions from a large group of people through social media and online platforms. Beehive, Eureeca, and Dubai Next are some crowdfunding platforms where donations can be gathered through a wide network including family, friends, and even strangers. Crowdfunding is also approved by the UAE government for both public and private sectors which shows their growing support for this method.
It is not easy to secure funding from traditional banks in Dubai, so crowdfunding has become a great Financing Options For Small Businesses In Dubai among entrepreneurs. Small businesses are mostly the ones who struggle to secure funding. However, their contribution to UAE’s GDP is significant, banks often hesitate to lend them money because of their limited assets and short business history. At times like these, crowdfunding becomes an alternative way to secure funding. There are different types of crowdfunding:
- Donation-Based Model
In this type of donation, people donate money to help entrepreneurs without expecting anything in return.
- Rewards-Based Model
People who contribute to this type of funding receive rewards or benefits in the future in exchange for lending money.
- Equity Crowdfunding
Investors get shares in exchange for their funding.
- Debt Crowdfunding or Peer to Peer Lending
In this type of crowdfunding individuals who are lending money, expect to get repaid with interest. Crowdfunding platforms decide the interest rate by themselves.
2. Angel Investors
Angel investors are usually rich people who provide Financing Options For Small Businesses In Dubai. They often join together in groups, called syndicates to invest in bigger deals and share the risk. Besides providing money, they also offer strategic advice to the companies. Here is the list of top angel investors in Dubai:
- Womwna
- Falcon Network
- Dubai Angel Investors
- Angel Network Middle East
3. Venture Capital and Private Equity
Venture capital invests in the early stages of high-growth companies. They often lend money in the exchange of ownership shares in a company. They invest in the companies that can bring high returns. They invest larger amounts of money even though there are significant risks involved. They take a more active role in managing the companies they invest in. Venture Souq, Shorooq Partners, and BECP Capital are the top venture capital investors in Dubai.
4. Business Incubators
Business Incubators in Dubai are organizations that help startups grow their business by providing them services like coaching, funds, office space, and networking connections. They also provide the startups with their expertise in various business areas when needed.
These incubators are usually part of free zones. By getting the support of the Dubai government, these incubators play a significant role in the growth of new businesses. Area 2071, and the Fazaa Center of Business Incubators and Accelerators are some top business incubators in Dubai.
5. Local Funding
To provide Financing Options For Small Businesses In Dubai, local funding programs in UAE help entrepreneurs secure funds for their business goals. To encourage businesses in Dubai, these programs are specially designed to provide subsidies, government grants, and other financial help. This type of funding is more beneficial than traditional Financing Options For Small Businesses In Dubai. Examples of local funding are:
- Khalifa Fund
To support entrepreneurs in the UAE, the Khalifa Fund was established by the Abu Dhabi Government. At the start, the accepted capital was 300 AED but later the amount expended to AED 2 billion. Along with funding, they provide important counseling on how to run a business more effectively, and technical guidance to foster talent in small entrepreneurs. They understand the significance of small businesses in Dubai’s GDP growth. So they provide them with financial help so that they can achieve their business goals.
- Dubai SME
Dubai SME was specially established in 2002 to encourage small businesses in Dubai. It is a division of the Department of Economic Development in Dubai that helps entrepreneurs settle their businesses and provide them with all the necessities to grow their businesses.
Banks in Dubai also provide loans for businesses but they need to be paid back with interest. However, getting a loan from banks can be tough for new businesses because they often need a good credit history and valuable collateral.
These Financing Options For Small Businesses In Dubai provided to entrepreneurs show their support to start any business in Dubai. You can secure funds for your business by considering these options. However, there are so many business setup consultants in Dubai to guide you on how to secure funding for your business.
Also Read: Low-cost Business Ideas In Dubai For Aspiring Entrepreneurs