A Guide to Financing Options For The Business

For starting a business, having a billion-dollar idea is not enough. It is important to understand that ideas don’t mean much without timing, execution as well as capital. In case you do not have the necessary funds, a business setup in Dubai or any other part of the world could become a bit complicated.

Capital, funding or investment is important to ‘take-off’ for research, creating prototypes, incorporation as well as commercialising the origination into the sustainable business.  In case you are worried about the funds, here are financing options that could be fruitful for turning your innovative idea into reality

Personal Investment

In case you think you have sufficient savings for financing the start-up business, then nothing could be better than this. You would need to worry about meeting the lender’s requirements or paying the high interest rates.

Even if you opt for loans from the bankers or investors later, this would prove your commitment to the business. As they would come to know you have invested a big part of personal savings, they might provide the loan approval faster.

Family & Friends

Asking your family or friends for money might seem intimidating. However, tapping the close ones is a great first step for Dubai Freezone company setup before you get external funding. It is advised to have the business plan ready before you ask your family or closest friends. Through the plan, you could explain to them what you would be selling, how you would make that, sample or prototype you have etc.

Moreover, you would be able to tell them about potential sales, competitors, risk factors as well as the way you would make money. Consider being realistic as well as honest so that they could understand because the relationship matters. Tell them if you are asking for an investment, a loan or a gift.

Bank Loans

Another significant financing option is the bank loan. Applying for a business loan is the thought that comes to the mind of every person who requires funds for starting a business. Banks provide numerous benefits to the loan-takers, ready to give personalised services or customised repayment methods.

You could look for a bank whose offers would meet your specific loan requirements. Remember, banks undergo numerous processes prior to approving the loan. It is advised to inquire about the bank’s requirements for the loan and check if you could fulfil such requirements.

Venture Capitalist

Venture capitalists are one of the potential funding sources for small businesses. These are the private equity investors who are ready to invest a large amount of money in spite of high risks. Because they stand for gaining big in case companies they support manage to launch the businesses as well as sustain the operations.

This kind of funding is beneficial to have the angel investors on board. Mostly, entrepreneurs feel confident about associating with venture capitalists while they have the local agent, partner or business setup consultancy.

Angel Investors

Angel investors refer to individuals, entrepreneurs as well as families having high net worth. They invest in start-up companies or early stage in exchange for the equity ownership interest. It is one of the fastest ways to get funding because this involves minimum paperwork and a straightforward funding procedure.

However, getting the right angel investor is a challenging part. Because it requires detailed knowledge of angel investors in the area or a local partner having sufficient resources to find and liaise with the investors. For a business setup in Dubai consider looking for reputed and reliable angel investors.

Local Funding & Outreach Programmes

You could raise capital for your business through local funding as well as outreach programmes like –

  •  Khalifa Fund for Enterprise Development

In 2007, the ruler of Abu Dhabi as well as the President of the UAE H.H. Sheikh Khalifa bin Zayed AI Nahyan publicised the launch of the Khalifa Fund for Enterprise Development. This fund provides convenient financing solutions to entrepreneurs, SMEs and local investors in the country. The mission of this fund is the promotion of entrepreneurship as well as investment in the UAE.

And, it fosters innovation as well as finance business ideas that are creative as feasible with impact on a variety of sectors in the national economy. The Programmes are divided into two categories i.e., Funding Programmes and Outreach Programmes. Funding Programmes include microfinance, Zeyada, AI Hasela, Bedaya, Zaarie, Khutwa and Tasnea. And, Outreach Programmes include Sougha, Amal, Ishraq and AI Radda targeting certain categories.

  • Dubai SME

It is an agency of the Department of Economic Development. This agency provides financing choices, among other support services to established SMEs as well as start-ups.

Institutional Investors

Another viable option for the Dubai Freezone company setup is getting a loan from the local institutional investors. These are companies having access to the funds of other people and invest those funds into a variety of projects. Banks are renowned kinds of institutional investors. However, other companies/ organisations like insurance companies as well as mutual funds also give business funding solutions.

Apart from these, another significant funding option for business setup in Dubai is business incubators. These are the organisations that provide full-fledged support to the start-ups at different stages of development. The support includes market positioning & launching to financing and marketing. They would even help in getting access to the potential investors in case they are unable to provide assistance themselves.

Mostly, incubators are under the government’s supervision for encouraging entrepreneurs for starting businesses and creating job opportunities. You could get in touch with the leading business incubators in UAE and make your idea a reality.

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