The facility is especially important for those keen to avoid slow growth, closure, or layoffs, especially during seasonal sales cycles, when revenues are low. Those with an existing business may seek financing or facilities from major banks or institutions.
A facility is an agreement between a company and a public or private lender that allows the company to borrow a certain amount of money for various purposes for a short period of time. The loan is for a specific amount and does not require collateral. The borrower makes monthly or quarterly payments, with interest, until the debt is fully repaid.
The Social Development Bankoffers various financing options that suit the stage of growth and size of your business, targeting businesses that have been in existence for 3 years or more and whose sales exceed 3 million riyals per year.
In line with the ambitious development goals of Vision 2030, which drew the business map and paved the way for joint cooperation, the Social Development Bank’ s contribution to increasing the contribution of small and emerging enterprises and productive families to the national economy, enhancing social services, financial planning represented by savings programs, and empowering non-profit organizations has emerged.
If the investment cost of the project exceeds five hundred thousand riyals, the percentage of the applicant’s self-contribution must not be less than 8% of the investment cost of the project and not more than 50%, according to the policies set by the bank’s management.
Grace period and repayment:
The beneficiary is granted a grace period starting from the date of the first disbursement of the first finance payment and a maximum of three years. The beneficiary is obligated to repay the amount of the financing as stipulated in the financing agreement, provided that the repayment period does not exceed 8 years starting from the end of the grace period, if any.
Legal personality requirements:
1. The applicant must be of Saudi nationality.
2. Have the appropriate qualification or experience to work on and manage the project.
3. Must be at least eighteen years old.
4. Financing may be granted to the applicant if he is a partner or owner of another facility, provided that the loan is spent on the project to be financed and its assets, and not used for another facility other than the applicant.
5. Not to combine two requests for financing from the Bank’s financing products in the projects sector at the same time.
6. Financing may be granted if the applicant does not have a functional branch, provided that a full-time Saudi manager is available to manage the facility with experience or specialization appropriate to the activity – this excludes professions that are not associated with an establishment.
7. The applicant’s financial and credit status should allow him/her to obtain financing.
8. Apply on the bank’s website and complete the other requirements related to the evaluation process.
Conditions for legal entities:
1. The entity requesting funding must be licensed by the competent authorities.
2. The entity must have people with the appropriate expertise to work on the project and manage it.
3. An establishment may obtain more than one financing for one product or more than one product at the same time. According to controls and conditions set by the Bank.
4. The applicant’s financial and credit status must allow it to obtain funding.
How is funding approved?
A committee shall be formed to approve the financing of small and micro projects, except for productive families, taxi and transportation, by a decision of the Bank’s General Manager, and its decisions shall be final and its mission shall be as follows:
1. Decide on the recommendation made by the department concerned with each program.
2. Ensure that the submitted project is compatible with the bank’s objectives and financing strategies.
3. Ensure the appropriateness of the financing amount and both the grace period and the repayment period proposed by the concerned department.
4. Ensure that all stages and procedures of the funding application have been completed.
5. Ensure the adequacy of the guarantees provided.
6. Recommend the project to be funded by the concerned department.
7. Approval of funding for the project by the committee.
8. Provide the required guarantees in accordance with the financing agreement.
9. Sign the financing agreement with the bank.
