Many UAE business owners hold significant equity in UAE real estate — whether residential, commercial, or investment properties. This equity can be unlocked as business capital through property-backed lending, providing substantial financing at lower interest rates than unsecured business loans.
How Lending Against Property Works in UAE
Property-backed lending in UAE allows property owners to borrow against the equity in their property — the difference between the property's market value and any existing mortgage outstanding. The bank takes a legal charge (mortgage) over the property as security.
LTV ratios for property-backed lending in UAE typically range from 50-70% of the property's current market value, less any existing mortgage. A property worth AED 5 million with no existing mortgage could support a loan of AED 2.5-3.5 million.
Types of Property-Backed Finance in UAE
Mortgage refinancing (equity release): Refinancing an existing property at a higher loan amount — using the additional proceeds for business purposes. Particularly effective when the property has appreciated significantly since the original purchase.
Property-backed business loan: A business loan secured against a property owned by the business or its shareholders, rather than relying on the business's own assets. Overdraft secured by property: An overdraft with a property as security — providing flexibility of an overdraft with the competitive pricing of secured lending.
Which Properties Are Eligible as Collateral?
Most UAE banks accept: completed freehold residential and commercial properties in Dubai and Abu Dhabi designated freehold areas; completed villas and apartments with registered title; and commercial properties including offices and retail units.
The property must be independently valued by a bank-approved valuer, and the LTV offered is based on the current market valuation — not the purchase price or the owner's estimate.
Using Property-Backed Finance for Business Growth
Property-backed lending can fund: working capital; acquisition of another business or franchise; expansion into new premises or markets; equipment purchase; or any other business purpose. The interest rate on property-backed lending is typically 1-2% below equivalent unsecured lending.
Gulf Oasis Commercial Brokers arranges property-backed business finance for UAE business owners — accessing the most competitive terms across the UAE lending market.