Trade and Working Capital Financing
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Key Fact Statement
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Eligibility
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Purpose
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Facilities
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Currency of Loan
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Repayment
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Interest Rate for FB Limits
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Securities
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Key Fees and Service Charge
Trade and Working Capital Financing : Key Fact Statement
Trade and Working Capital Financing
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Trade and Working Capital Financing : Eligibility
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Entities licensed to operate in the UAE.
Trade and Working Capital Financing : Purpose
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To meet fund-based and non-fund-based working capital requirements of the entity for activities as permitted under the trade license of the entity.
Trade and Working Capital Financing : Facilities
- Line of Credit (LOC)
- Overdraft (OD)
- Demand Loan / Working Capital Demand Loan
- Trust Receipt (TR) / Invoice Financing
- Letter of Credit (LC) / Foreign Bill Purchase (FBP) / Foreign Bill Discounting (FBD) / Local Bill / Invoice Discounting
- Foreign / Inland LC (Sight / Usance)
- Bank Guarantee (Bid Bond / Tender Bond / Performance Bond / Advance Payment / Financial / Other Guarantee) – for business purpose, working capital purpose etc.
Trade and Working Capital Financing : Currency of Loan
- AED (Arab Emirates Dirham) / USD (US Dollar), subject to regulatory guidelines.
Trade and Working Capital Financing : Repayment
- Repayment / settlement shall be as applicable to the relevant facility/product as specified in the Facility Sanction Letter and applicable facility documents. Certain facilities may be repayable/settleable on demand.
Trade and Working Capital Financing : Interest Rate for FB Limits
- Emirates Interbank Offer Rate (“EIBOR”) (For credit facilities denominated in AED) / Secured Overnight Financing Rate (“SOFR”) (1, 3, 6, 12 months) (For credit facilities denominated in USD) + Margin = Effective Rate, based on the currency of limits sanctioned.
- A floating / variable interest rate linked to EIBOR / SOFR, as applicable, shall be charged by the Bank based on its assessment and the terms stipulated for the facility. Interest shall be calculated on the amount actually utilized under the facility and shall be debited to the customer’s account on a monthly basis, with the interest relating to each individual facility / utilization becoming payable as and when charged in the account or on its respective repayment date, as applicable to the facility type. Interest shall be debited as and when charged.
Trade and Working Capital Financing : Securities
- Unsecured or secured as per the separate Facility Agreement signed with the Bank, detailing all Terms and Conditions.
- Security in the form of tangible assets, such as stock, receivables etc. to be acquired out of the loan proceeds, and / or other collateral securities acceptable to the Bank at its discretion. The securities shall be duly created, perfected and registered with EIRC and / or the relevant authority, as applicable.
- In addition, other forms of security which may include Guarantees from corporates, individuals or banks may also be required.
Trade and Working Capital Financing : Key Fees and Service Charge
| Key Fees and Service Charges | |
|---|---|
| Processing Fee | As per the Facility Sanction Letter |
| Review / Renewal Charges (Annual basis) | As per the Facility Sanction Letter |
| Documentation Charges | As per the Facility Sanction Letter |
| Commitment Charges | As per the Facility Sanction Letter |
| Valuation Charges | Valuation is an independent assessment to determine the current value of the Primary / Collateral Security. Valuation fees of the valuer will be based on the scope of the valuation, size and type of the primary / collateral security. The expenses towards the same shall be borne by the borrower/s at actuals. |
| Legal Fees / Charges | Work related to execution of documents and vetting of the documents will be carried out by the Bank’s legal department / Bank’s empanelled legal counsel. The expenses towards the same shall be borne by the borrower/s at actuals. |
| Insurance of Securities | Adequate insurance cover for all assets of the entity, i.e. Primary like stock and other insurable collateral security (like Machinery & Equipment, Building etc.), to be taken as per the Bank’s guidelines and expenses to be borne by the borrower/s. Insurance shall be arranged by the Borrower/s at its own cost, with the Bank's interest duly noted/endorsed or the policy assigned in favor of the Bank, as applicable. In case, if Borrower fails to arrange the Insurance, Bank may arrange it with charges to be debited to Borrower/s account. |
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What is a SME loan?
An SME is a business with fewer than 250 employees and annual revenues below AED 250 million. However, the definition may vary depending on the industry.
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What types of SME loans does Bank of Baroda UAE offer?
- We offer SME loans like working capital finance, term loans, and project finance.
- Our specialised setup and dedicated staff cater specifically to SME customers.
- We employ streamlined processes based on assembly line principles for faster turnaround time.
- Marketing/sales and credit processing/sanction are handled together for efficiency.
- Latest technology and skilled manpower are utilised to provide focused services.
- We have a strong understanding of industry/market developments for tailored solutions for SMEs.
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How do I open a SME loan account with Bank of Baroda UAE?
To open a SME loan account with Bank of Baroda UAE, fill out the application form, attach the necessary documents, and submit it at our branch.
