Dubai-based Gulf Finance said it has launched SME Advance, an innovative product that tackles real issues faced by start-up and small businesses seeking financing to boost business growth.

A specialist in the small and medium enterprise (SME) market, Gulf Finance said the product is a much needed window of financing for start-up companies.

It provides local small businesses with a secure finance option which will not see SMEs penalised for bounced repayment cheques – a chief differentiator for this product, said a top official.

'SME Advance has been specifically designed to suit smaller firms and thus does not require more than only basic financial and operational company information,' explained Steve Williams, CEO of Gulf Finance.

'Swift lending decisions can be made on client applications to allow businesses access to funds as quickly as possible.'

The product also offers an interest-only period option for start-up businesses with tighter cash flow, an extended tenor of up to five years and a simple online application process. Business assets and collateral are not mandatory and the product also boasts the flexibility of zero early settlement fees should a business wish to repay the loan early.

SME Advance is applicable to a range of industry segments, with a clear focus on start-up and younger firms. With this new product, Gulf Finance can offer loans up to Dh250,000 ($68,062) to businesses with turnover of up to Dh1 million.

SME’s contribute extensively to the UAE economy – they are responsible for 90 per cent of the business universe, generate 30 per cent of GDP and are responsible for 88 per cent of employment.

The sector is also growing at an annual rate of up to 25 per cent which solidifies the need for a product such as SME Advance to boost this vital market.

According to Williams, SMEs face a lot of difficulties in accessing capital. 'This problem is particularly acute in this region; the complexity of SMEs’ business models coupled with their limited track records often result in variable lending appetite from mainstream financial institutions,' he noted.

Williams said that taking the tough decision to start up a small business should be applauded.

“Gulf Finance recognises that while many small businesses will succeed, there are those that may fall short. What is important is that a culture of entrepreneurship is developed. Gulf Finance is therefore taking a unique approach to supporting SMEs,' he added.-TradeArabia News Service