Every growing business faces periods when expenses outpace incoming revenues. Working capital finance bridges these gaps, ensuring your business can pay staff, settle supplier invoices, and pursue new opportunities without disruption — even when customers are slow to pay.

What Is Working Capital?

Working capital is the difference between your current assets (cash, receivables, inventory) and your current liabilities (payables, short-term debt). A positive working capital means your business can meet its short-term obligations. Working capital finance provides the liquidity to maintain this cushion during tight periods.

Types of Working Capital Finance Available in UAE

  • Overdraft Facility: A revolving credit line attached to your business account. Draw and repay as needed — interest charged only on the drawn amount. Best for ongoing, unpredictable cash needs.
  • Short-Term Working Capital Loan: A lump-sum loan repaid over 6–36 months with fixed monthly instalments. Suitable for a specific, planned cash need.
  • Invoice Discounting / Factoring: Sell outstanding invoices to a bank or factoring company for immediate cash — typically 80–90% of invoice value. Eliminate the wait for customer payments.
  • Supply Chain Finance: Buyers extend payment terms while suppliers get paid early via the bank facility. Both parties benefit from improved cash positions.
  • Purchase Order Finance: Funding to fulfil a large purchase order before customer payment arrives. Repaid once the buyer pays. Ideal for product businesses that win contracts exceeding their current cash reserves.

Eligibility Requirements

  • Business registered in UAE for a minimum of 1 year (some lenders require 2 years)
  • Minimum annual turnover of AED 500,000
  • Active business bank account with 6–12 months of clear transaction history
  • Valid trade licence for the relevant business activity
  • No existing bank defaults, bounced cheques, or active legal disputes

Typical Facility Sizes in UAE

  • Overdraft: AED 100,000 – AED 10,000,000 (based on average monthly turnover)
  • Short-Term Loan: AED 200,000 – AED 5,000,000
  • Invoice Finance: Up to 80% of eligible outstanding invoices

Common Mistakes to Avoid

  • Using short-term working capital finance to fund long-term assets — this creates a dangerous cash-flow mismatch
  • Over-borrowing: finance only the gap you genuinely need, not a speculative buffer
  • Ignoring facility fees and interest when calculating the profitability of a project
  • Failing to maintain clean bank statements in the 12 months before applying