The UAE’s First Gulf Bank (FGB) has launched a new line of start-up financing including trade and working capital facilities, as well as business current accounts, credit cards, loans and overdrafts, with no collaterals required.

The ‘Start-up Proposition’ will allow new businesses to access a no minimum balance current account and Platinum Visa business credit card in the first six months of operation, along with an overdraft or a start-up loan after six months.

In the first 18 to 24 months of operation, a combination of cash loans and trade facilities will be made available to them.

Hana Al Rostamani, head of consumer banking at FGB, explains: “Starting any new business requires funding, however SMEs often find it difficult to access the financial support they need to get up and running, and start operating efficiently.

“With the launch of our new ‘Startup Proposition’, we want to meet businesses’ immediate requirements and cater to their needs at each stage, without collaterals required. As part of our efforts to further develop the SME segment in the UAE, we’re looking to build long-term partnerships with local businesses and support them throughout their business journey.”

The UAE is a breeding ground for SMEs, which account for almost 92% of the overall number of companies, yet only represent 4% of total lending, according to the bank.

A number of alternative finance providers have capitalised on the country’s SME funding gap, but banks are now showing increased interest in financing the segment.

Additionally, UAE SMEs benefit from a number of government initiatives, including the Abu Dhabi-based Khalifa Fund, which provides start-up and growth capital for national entrepreneurs, and the Mohamed bin Rashed Establishment (MBRE), a Dubai-focused programme open to SMEs of all nationalities.

The country also passed an SME law last year, which includes a many financial support measures and aims to raise the contribution of SMEs to the country’s economic output from 60% today to 70% in 2020.