Funding Required for a project in Dubai (UAE)

**magicpashu** · 11-19-2009 05:44 PM

Hi All..

I am Prasanth. We are a group of 4 friends who are planning to start a catering business in Dubai (United Arab Emirates). Our capital requirement is about AED 400,000 (USD 109K approx). Out of this, we are sure to mobilize around AED 300,000 ourself. However we are unable to raise AED 100,000 ourself. The reason being that one of our partner is based in India and would join us here in Dubai when the business starts. He is employed in India and is not eligible for much of a loan there. Also, as per UAE banking rules and regulation, even if he comes here, getting a loan for him would be a problem as his company of employement has to be listed with banks here for loan approval (in this case, he will be joining our new company which cannot be listed atleast during the first 1 year of operations). So we are kind of in a fix at the moment.

If any of you can help us with some kind of term loan with fixed interest for AED 100,000 (approx USD 28K) or even suggest some other ways to raise finance, it would be really helpful.

Thanks...

You can contact me on magicpashu at geemail dotcom

**Encrypted** · 11-19-2009 07:33 PM

I'm just curious.. what could you possibly need for a catering business that requires 109k upfront? I could probably start one with $1,000.

**bkendra5** · 11-19-2009 08:29 PM

haha encrypted true that.

**DomainJr.com** · 11-19-2009 09:46 PM

Originally Posted by magicpashu

Hi All..

I am Prasanth. We are a group of 4 friends who are planning to start a catering business in Dubai (United Arab Emirates). Our capital requirement is about AED 400,000 (USD 109K approx). Out of this, we are sure to mobilize around AED 300,000 ourself. However we are unable to raise AED 100,000 ourself. The reason being that one of our partner is based in India and would join us here in Dubai when the business starts. He is employed in India and is not eligible for much of a loan there. Also, as per UAE banking rules and regulation, even if he comes here, getting a loan for him would be a problem as his company of employement has to be listed with banks here for loan approval (in this case, he will be joining our new company which cannot be listed atleast during the first 1 year of operations). So we are kind of in a fix at the moment.

If any of you can help us with some kind of term loan with fixed interest for AED 100,000 (approx USD 28K) or even suggest some other ways to raise finance, it would be really helpful.

Thanks...

You can contact me on magicpashu at geemail dotcom

Do you have a business plan already developed? I wouldn't think anyone would give money without assurance you could pay it back. If banks won't lend you money I have to think more is needed on your end to prove a solid business case and/or plan. If you need help with this I'm sure many on this forum have the talent to help.

**magicpashu** · 11-20-2009 05:45 PM

Hi everyone...

First of all thanks a bunch for your replies... I know that you are all curious about this project especially cos of the requirement of USD 108K...

well... if any of you are aware of the UAE business setup procedures... you would agree with me that the cost of setup alone would be broken down into the following costs :

Trade license and other setup fees(including sponsorship fees) USD 5,500.
Employment Visas (for about 10 staff initially) USD 25,000.
2 second hand vehicles initially USD 11,000.
Kitchen equipments USD 29,000.
Site improvements (to bring in line with muncipality requirements) USD 32,000

The above are just some of the costs.... There are hell lot more expenses which are necessary...

With regards to why we cannot raise loans from banks is because... as i mentioned, all four of us are working people... we do not have an existing business to apply a loan on... and as per UAE banking regulations, no loans are given to people who are desirous of starting a business.. only after starting business will banks give loans...that too after say 6 months of operations and submitting half years accounts...

We do have a business plan ready... incase someone wants to ensure if we are a hoax or not.... Plus we arent talking of borrowing without any sort of guarantee to the lender... we are ready to accept whatever terms laid down by the lender/venture capitalist/angel investor if they seem to be something which we can accept.

regards

**Gator** · 11-20-2009 10:37 PM

Employment Visas (for about 10 staff initially) USD 25,000.

Just a suggestion, why don't you cut these by employeing local staff?

**magicpashu** · 11-21-2009 01:22 AM

Hi Gator...

Here in Dubai... you cannot get local arab people to do blue collar jobs. Plus even if I get some guys to work by some miracle.. they will not work for salaries that expats would be ready to work for (avg salary that I can pay an expat blue collar worker can be USD 450 per month)...

Its all these initial setup costs and regulations that makes this place a difficult place to start business...however once the biz is set...I dont think there is a better market than this..