For the founder of a small to medium enterprise (SME), sourcing funding to help grow a business is a tricky road to navigate.

While SMEs represent almost 92 per cent of registered companies in the UAE, they only account for three percent of total loans from the banks.

That figure highlights how a smaller enterprise will struggle to secure the finance they need when they approach their bank with a business plan. So what funding options, outside of traditional bank lending, are available?

You and your family

Well, the first step is to consider your own finances. Can you realistically fund your venture yourself, or could you call on the help of your family? For a start-up or early-stage business with low overheads, this might be an effective tool to get a business off the ground. But you need to evaluate your start-up costs carefully to ensure you do not run out of cash.

Angel investors

For some, mixing business with family money or their own savings is a recipe for disaster, so they may prefer to turn to an angel investor. This is often a successful business individual who is interested in investing their personal funds into a potentially lucrative opportunity. Because an angel investor is risking their own money, there is often a cap on the amount they are willing to put in, and they will generally prefer to invest into early-stage or start-up businesses. However, as well as capital, they may have a personal interest in your business, bringing with them expertise and contacts to help a venture grow.

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Venture capitalists

A more suitable option for an SME, rather than a start-up, is to seek funding from a venture capitalist (VC). This is a company that invests directly into a private company using other people’s money. They raise that capital by offering investors the option to buy into a fund that then buys shares in your company. A VC will therefore have a higher appetite for risk and a bigger pot of cash to invest. They will generally choose to invest in more established companies where a business concept is proven to work. A VC might also demand a seat on the board.

Companies that have already bought into UAE-based SMEs include the Antwerp-based Hummingbird Ventures, which has invested in MarkaVIP and CicekSepeti, as well as Rocket Internet, the Berlin-based e-commerce investor, has also made several investments across the region, including in the UAE-based Closer to home, Wamda, supported by Abraaj Capital, is made up of serial entrepreneurs and investors. Its program offers both funding and the expertise/ mentorship needed to develop a venture.


A more modern approach to financing an enterprise is to crowd-fund it. This is the practice of raising small amounts of funding from a large number (or crowd) of people – something that usually takes place online. For the funders, the attraction can be rewards or, sometimes, even equity in the company they are helping to finance. For the entrepreneur, it can be a swift way to fund new products or services. While the start-up can raise money to buy equipment for an office, an SME could finance an expansion plan.

There are a number of regional crowd-funding sites that link entrepreneurs to investors. These include, targeted at micro and small entrepreneurs in the low-tech industries of the Arab world;, a UAE-based crowd-funding platform supporting creatives in the Arab community, and, a home-grown crowd-investing platform, raising funds from retail as well as other global investors in exchange for an equity stake in an enterprise.

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Incubator and accelerator programs

Those looking for a full schedule of mentorship as well as a financial boost can turn to a local business incubator or a seed accelerator – programs that start-ups or early-stage enterprises can apply to enter. Depending on the type of business it is looking to help, an incubator will usually rent technology, office space or manufacturing equipment to businesses that apply. Several businesses are often housed under one roof; the idea being that the incubator will nurture these businesses’ growth.

Incubators may be privately or government-run, and most are not-for-profit. Some UAE programs to consider include DP World’s TURN8 seed accelerator incubation program, which is based in Dubai and designed to foster global innovation within the Emirates.

There are also government-run initiatives targeted at the Emirati community and offering funding and support programs. Dubai SME’s Intilaq Program offers start-ups funding and training courses as well as financial, legal, and technical assistance. Similarly the Khalifa Fund for Enterprise Development, which offers funding and training and development, was launched in Abu Dhabi in 2007 to help develop Emirati-run local enterprises.