How to obtain a mortgage on your commercial property in Dubai

Thinking about purchasing a commercial property in Dubai?

You might have a commercial mortgage on your mind, and while these mortgages may seem complex, navigating them in Dubai is far simpler than you think. With mortgage rates in the UAE being friendlier than when compared globally, and with better lending options, a commercial mortgage in Dubai is much easier for property buyers.

To make things easier, our in-house experts at Allsopp & Allsopp Mortgages have a pocket friendly guide to obtaining a commercial mortgage in Dubai.

Step one - Research lenders:

Before jumping into an application, or any sort of mortgage plan, begin by exploring the different banks, financial institutions, and lenders in Dubai that offer commercial mortgages.

Take a look at ADCB, Mashreq, Emirates NBD, and HSBC - these are some commonly used bank lenders for commercial mortgages in Dubai.

You can start by comparing the different interest rates offered, loan terms, fees, and customer reviews to find the bank lender that suits your business needs.

Step two - Determine your eligibility:

Before applying for a commercial mortgage or any mortgage in the UAE, it's important to assess your eligibility.

In order to assess your eligibility with banks in the UAE, the bank lenders typically consider factors such as your business's financial stability, creditworthiness, industry experience, and the purpose of the loan.

Make sure your business meets the lender's criteria before proceeding, and as a rule of thumb always keep important documents such as:

• Company trade licence
• Bank statements, company and personal statements (last 6 months)
• Emirates ID, and passport copy of the company owner
• Last two years audited financial statements

These four documents will be handy at any point during your application, so ensure you always have them with you.

Step three - Assess your loan amount and repayment plan:

Once you’ve found the bank lender that works for you, begin by assessing the loan amount you require from the bank and the bank will create a repayment plan for you on the basis of that.

Determine with the bank how you will repay the mortgage over the loan term, as lenders will want to know that you have a viable plan to generate revenue and service the loan.

Once you have configured this with the bank, you can put in your application.

Step four - Gather the necessary documentation for your application:

You want to prepare all the required documents to support your commercial mortgage application. Common documents include:

Business plan: This is the most important form of documentation you would need to provide to your bank. A business plan should outline your business's objectives, financial projections, and how you intend to use the loan - ensure this is as detailed as possible, with figures and statements. This will increase the chances of the bank granting you the mortgage.

Financial statements: Provide balance sheets, profit and loss statements, and cash flow statements for the past few years. This can also include your personal bank statements and audited reports of the company for the last two years.

Although, if you did not have a business prior to this, you can provide an ex-salary certificate, bank statements of the last two years, the company’s new trade licence and employment contracts, or any other relevant legal documents you might need.

Property documents: If you already have a property in mind, provide details about the property, including its value and ownership documents, and if you already own a property, you can showcase that.

Step five - Submit the application:

Now that you’ve covered all the steps, you can contact the chosen bank lender to inquire about their application process.

You may apply online or visit the bank's branch in person, where you can complete the application form and submit all the required documentation. Always ensure you have double-checked everything in order to avoid delays in the processing of your application.

Step six - Review and evaluate:

Once you’ve submitted the application, the bank lender will review and evaluate your everything in your application.

This process can take anywhere from seven business days to several weeks, as they assess the risk and viability of approving the commercial mortgage.

Step seven - Receive the offer:

If your application is approved, you will receive a formal offer from the bank lender. Review the terms and conditions, interest rates, and loan tenure carefully, and once it’s all good to go - you’re in!

Last step - Accept the offer and finalise the mortgage:

If you are satisfied with the offer, accept it by signing the required documents. The lender will then finalise the mortgage and disburse the loan amount.

It is important to note that there are additional fees and expenses during the closing process.

Found this helpful?

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