Corporate banking
SME lending and business finance
Lending to small companies here rests on personal guarantees and security cheques far more than on the business itself — which converts a company failure into a personal one, including a travel ban.
The reality
What the bank is actually deciding.
SME finance in the UAE covers working capital facilities, overdrafts, term loans against equipment or vehicles, and receivables finance. Availability has improved as banks and newer institutions have built SME books, but the underwriting remains conservative: audited accounts, turnover visible through the account, a trading history of at least a year and usually two, and security. That security is commonly a personal guarantee from the shareholders and, frequently, a security cheque — an undated cheque held by the lender against default.
The security cheque is the part that deserves attention before signature rather than after. It converts a corporate borrowing into personal exposure, and if it is presented and returned unpaid the consequences run beyond the debt: it can produce a travel ban and, historically, criminal exposure, though the law here has been reformed. Founders sign these as a formality during a growth phase and encounter them during a downturn, at which point the company's limited liability is no longer the operative fact. Anyone signing a personal guarantee or a security cheque should know precisely what would trigger it and what their position would be.
What gets asked for
- Typical requirements
- 1–2 years' trading, audited accounts, account turnover
- Security
- Personal guarantees and security cheques are standard
- Effect
- Corporate borrowing becomes personal exposure
- Bounced security cheque
- Can produce a travel ban
- Rates
- Vary widely by institution and profile — compare
- Alternatives
- Invoice discounting, equipment leasing, shareholder funding
Where the time goes
Proportions indicative — they shift with visa count, premises and activity.
The file
What to put in front of them.
- Build the visible record firstTurnover through the account and clean audited accounts are the two things every lender starts from.
- Read the security terms before the rateThe guarantee and the cheque matter more to your personal position than a point of interest.
- Establish the trigger events preciselyWhat constitutes default, what notice is given, and when the cheque can be presented.
- Compare more than one lenderSME pricing and security requirements differ substantially, and the first offer is not the market.
- Consider whether you need debt at allReceivables finance, equipment leasing and supplier terms solve many working capital problems without a personal guarantee.
Related
Questions
Generally not in the first year. Lenders want trading history, audited accounts and visible turnover before extending credit.
For SME lending here it is close to standard. It is negotiable at the margin and rarely removed entirely.
It can lead to a travel ban and civil enforcement. The law has been reformed but the practical exposure remains significant.
The structure differs — murabaha and ijara rather than interest-bearing loans — but the security requirements are broadly comparable.
One question
Where will the money actually come from?
Then the account is a cross-border file, and the compliance question is which countries and in which currencies. Name the corridors in the application rather than waiting to be asked — an unexplained payment from a jurisdiction the bank did not expect is what freezes accounts in month three.
What the file has to containOr just ask usThen substance is the question rather than geography. A local trading history, an Ejari and a customer list make this straightforward; a flexi-desk with no domestic contracts yet is where onboarding slows, and the fix is evidence rather than a different bank.
Why applications get declinedOr just ask usThen source of wealth carries the file, and 'savings' is not an answer. A share sale agreement, a property disposal, audited accounts from an overseas company or a series of tax returns are. Assemble that before the first meeting, not after the first question.
Evidencing source of fundsOr just ask us