Project financing / funding in Dubai, UAE - carries, by definition, higher risks for the creditor banks, has many similarities with the venture capital funding. Due to this reason, despite of the fact that these types of financing fundamentally differ from each other, approach in the preparation of project documents for submission to banks in the UAE (in case of project finance) and investors (in the case of venture capital financing) is quite similar.
Due to this fact the professional and complete documentation on the project in the UAE is one of the core components for a positive decision of the bank. When preparing the documentation for the project financing it is necessary to pay special attention to the sources of income within the project to ensure timely and complete pay-back of the loan payments. Another important role plays the duly and realistically prepared project feasibility studies with the properly prepared project strength and weaknesses analysis (SWOT).
The important component within the bank’s evaluation of the risks of project financing / loan is whether the project is fundamentally new area of the business for the company or it is directly linked with the expansion of existing company business activities.