Compare the best options on the market and choose the one which best adapts to your day to day needs.
Further Below: Our Guide To Business Loans in Jordan, Everything you need to know.
1. Jordan Commercial Bank
- Get a loan starting from JOD 3000
- Offers a loan tenure of up to 120 months
- Stable and attractive interest rates
- Allows salary transfer from other banks
- Loan purpose meets all society’s needs
- Applicants with stable income are considered
- Issues credit cards with no fee attached
- Charges only 1% commission fee in the first year
- Offers top loan conditions
- Fast payout
2. Arab Jordan Investment Bank (AJIB)
- Get a loan of up to JOD 75,000
- Offers descending interest rates
- Longer repayment terms of up to 1o years
- Offers both secured and unsecured loans
- Guaranteed life insurance through the repayment period
- Unlimited loan purpose
- Offers loans to applicants with fixed income
- Fast and simple online application
- Seamless eligibility criteria
3. BLOM Bank (Kardi loan)
- Offers a maximum loan amount of JOD 40,000
- Flexible repayment period of up to 10 years
- Reducing balance interest rates of 9.5%
- 50% of monthly income loan burden ratio
- Collateral required for security
- Offers loans for various purposes
- Hassle free application process
- Creditworthiness is a factor of consideration
- Fast concessions
Business Loans in Jordan, All You Need To Know:
We are dedicated to educating our potential users on all aspects of Jordanian business financing, including the different types of credit available, the requirements for receiving grants and loans, and the paperwork needed. Additionally, we streamline the loan application procedure by providing the user with all the insider tips for obtaining credit that is most in line with their demands and unique characteristics.
[UPDATE] What economic measures has the Government implemented for companies through covid-19?
At the onset of the pandemic, Jordan, just like many other countries in the world, started putting in place measures and policies that would help cushion businesses from the virus’ harsh ravages after the WHO confirmed the pandemic’s existence on 27th February 2020.
- The Central Bank of Jordan simplified lending terms for SMEs, lowering their policy rates and increasing liquidity rates by lowering reserves on time deposits. The government is additionally speeding up the process of paying back all areas from private economic sectors as promised earlier.
- The joint support program formed by the IMF and Jordanian economic authority issued a $1.3 billion Extended Fund Facility to boost the economy during the pandemic. The funds were distributed on social safety support, job allocations, and general economic growth. The fund also supported wage payments in the public sector and lowers the prevailing debt cost.
- The IMF also approved a $396 billion emergency fund for the Rapid Financial Instrument. These funds helped in boosting the domestic revenue for domestic banks and maintain a good fiscal policy.
- The Jordanian government waived payment of the sales tax charged on goods and services, custom duty payment, social services charges, and validation and expiry dates of the trading license were also extended. It also initiated a system of enacting open tax appeals
- There was a reduction in the rates of total social security contribution from 21.75% to 5.25% as a result of voluntary deferment of its components such as payment of the old age fees to its employees for three months.
- Companies listed in the Golden and Silver importers change their customs and import procedures by paying import duties in installments in 30% and 70% proportions until a further directive is issued.
- Further regulatory measures were given for the imports and customs including:
- The controls set on transit goods were limited
- Goods imported for local consumption inspection percentage was reduced
- Cooling charges and grace period fees were reduced at the Aqaba port
- For around three months, the government will cover the existing expenditures of salvaging enterprises and SMEs with bank guarantees. Independent contractors whose businesses were shut down by the shutdown got compensation or insurance benefits through the earning loss allowance scheme.
Distinguishing types of company profiles
Your business’s financing is based on several factors. Your company profile, among other factors, is a significant determinant of the type of funding you receive. Let’s explore the various company models:
- Entrepreneurs: this alludes to a business idea that has not yet come to pass. When the entrepreneur receives funding, it comes to fruition. The business owner is simply making plans at the moment.
- Start-ups: This kind of enterprise already exists but hasn’t yet gained popularity. The company can still be losing money, and it might not be making a lot of money. At this point, the owner might need to obtain funding, which presents a challenge if the company is not sufficiently solvent. The majority of lenders will be reluctant to provide finance for a company that isn’t able to guarantee loan repayment. Consequently, the company may not be profitable for the owner.
- Consolidated companies: This kind of enterprise has been in operation for some time, generate substantial profits and is financially sound enough to be approved for some good loans. The company’s solvency gives the lenders comfort when financing them. The company is enduring.
- Large companies: These are companies that operate on a huge, either national or global scale. In millions of Euros, or dollars if not billions, the financial requirements are likewise enormous. For instance the Jordan National bank, and the Central Bank of Jordan among others.
Characteristics of business loans
The type of business loan mainly depends on our company’s credit profile and type of credit. Regardless of how unusual the credit is, the following are some of the most typical traits to watch out for:
- Cost: Your business profile and the sort of credit firm may both have an impact on the cost of your loan. The average lending rate in Jordan has been fluctuating, reaching 7.0% p.a. in 2021, according to World Bank statistics. This encourages borrowers to accept loans because the costs are coming down.
- Purpose: The loan purpose encompasses a variety of activities, including buying products, paying off supplier debt, increasing investments, purchasing new machinery, and other activities.
- Loan size: this depends on the unique needs of your company, your well defined business objectives, and your prospects.
- Repayment: Some organizations will ask you to pay in regular installments, while others will expect you to make a final lump sum payment with interest. Choose the option that best suits you as a result.
- Linkage: A company loan typically comes in a batch. As a result, you should be aware of any associated products that could come at an additional expense.
- Repayment terms: The length of your payback period will depend on the sort of credit you have; nevertheless, maturities might range from 3 months to 60 months.
- Grace period: at this time, you can go without paying the loan without attracting any penalties.
- Guarantee: Different guarantee terms will be determined depending on your business profile and loan size. If you’re requesting a substantial loan, you could also need to provide collateral in addition to payment insurance.
- Speed: Another important factor to think about is how quickly you will receive your funds after your loan application has been approved. Typically, it takes 3 to 21 days to get the money in your hands if it’s a manual application and within 30 minutes if it is an online application.
Consumer credit regulations in Jordan are imposed by the government, however, non-bank lenders frequently have their own set of requirements for applicants. Therefore, it’s crucial to be certain of the contract’s terms before applying for a loan. Before taking out a loan, do your investigation into the credit company’s background and reputation.
Where to get business loans
Numerous entities entered the Jordan financial sector as the desire to depart from the traditional method of credit provision grew stronger. Non-bank loan providers have emerged to compete with banks in terms of their loans.
- Banks: The company requesting a loan must be a legal entity and have a high level of solvency. Banks offer a wide range of financial products to their potential customers.
- Companies and private capital lenders: The majority of lenders in this category allow borrowers to apply for loans online, which makes the process much simpler and quicker. Many individuals choose them since the application process is quick, can be done from anywhere, and the credit has fewer qualifying requirements than in banks. However, compared to bank business credits, the loan size is typically smaller.
- Alternative financing platforms for crowdlending: These platforms will connect us with individual investors, who will then determine whether to provide operating money in response to our requests for business loans. These investors will profit from our degree of risk, which we will compensate them for by paying them interest. All of these credits are processed online, and we will have a response in 24 hours
Business loan conditions
The criteria for receiving funding will differ depending on the type of loan we seek as well as the organization with whom we choose to submit the credit application. However, all businesses must adhere to a few fundamental requirements to be eligible for loans:
National registration: Only after obtaining national registration can a business be considered legitimate. As a result, before financing your firm, lenders will check this as one of your credentials. You prevent traveling back and forth and make sure to fulfill all registration criteria before applying for a loan.
Annual income: You’ll need to have your account records, yearly financial statements, and annual reports before you can be approved for company credit. For the lender to determine if you can repay the loan, they will need this information.
The seniority of the company: Your business’s stability and the type of loan it is eligible for are dependent on how long it has been in operation. Less money will be given to a business that has been operating for less than a year than to one that has been operating for ten years.
Credit history: Your company will be immediately denied a business loan if it has a bad credit history. Before approving your loan application, the lender will contact various Jordanian credit bureaus.
Note: whether you meet all the requirements for financing or not, the lender is not obliged to give you the loan.
Documents needed to get funding
- Registration certificate
- VAT return from the previous year and the current year.
- Income tax return.
- Corporate tax compliance proof
- Bank statement (if in another bank).
- Companies’ turnover balance sheet
The lender may require you to deliver the mentioned documents to their offices, transmit them through email, upload a photo, or utilize a courier. To find out if the entity needs any other documents in addition to those we’ve listed above, check with them directly.
Other forms of financing for companies
- Business credit lines
Unlike other forms of financing, business lines of credit allow borrowers to withdraw funds incrementally and repeatedly up to the borrowing limit. Additionally, rather than paying back the whole amount that the lender extends, the borrower is only expected to pay back the amount they have withdrawn plus interest. This kind of financing is popular among borrowers, especially those who require ongoing small-dollar loans.
Small and medium-sized businesses benefit most from this sort of financing because the borrower can use the money to pay all of his suppliers’ invoices. Depending on the agreed-upon loan terms, the borrower will be required to pay the lender the sum utilized to settle the invoices plus any accrued interest.
- P2B or crowdlending loans
A business borrower obtains business loans from a crowd on an online platform in Jordan through business crowdlending. Investors and borrowers can communicate online. Depending on our agreement, the investors may decide to finance the company directly or support a few projects.
- Loans with mortgage guarantee
In this case, the borrower must provide real estate that will serve as a guarantee of some kind. Without it, no financing will be provided to the borrower. Due to the need for appraisal procedures, the application process often takes longer. So, when we need quick loans, it could not be the greatest choice.
Products to invest in our company
- Equity Crowdfunding
Crowdfunding, as the term implies, entails obtaining capital for businesses that have been raised by numerous people or organizations. You can sell your investment instruments, such as company shares and others, using crowdfunding portals.
- Business Angels
Platforms for business angels connect investors and borrowers. Business angel investors choose the companies they would invest in rather than working with specific business owners. Once they decide to work for your business, they will always be in the management. If you’re simply working on a small project, you might lose the chance to receive funding from business angels.
- 3F (Friends, Family, Fools)
The 3 F’s (Friends, Family & Fools) are another source of finance for our business. The amount and other conditions depend on the agreements between both parties.
Aid for the financing of companies
- Capitalization of unemployment
Only self-employed borrowers who intend to launch a business can get this kind of funding. If the capital is used to launch a new business, the borrower will be able to utilize all unemployment benefits.
2. Government Subsidies and Grants
The government offers a lot of assistance for starting or expanding businesses. You may find out if your company qualifies for grants or subsidies by visiting the website of the Jordan Agency for Development and Cooperation.
About this page and our methodology
About this page: We take great pride in assisting you in obtaining the greatest financial solution that is appropriate for your financial condition. Through these, we gather the best information on consumer loans and compare the available offers so that you can choose the most appealing offer at the time
Source: The information regarding the main characteristics of loans in Jordan and their current regulation comes from Government portals, World Bank statistics, and the Jordan Consumer Credit Act, among other reference portals.
Methodology: The data relating to the conditions of these products (amount, term, interest, etc.) have been obtained through online research and consultation of the official statistics of the aforementioned reference sources.
About Us: FUNDGECKO is a website that evaluates products online with a focus on personal finance and home economics. In addition to assisting customers in comparing the financial products on the market, we also give comprehensive information that will speed up decision-making and enable consumers to choose the best deal.
Note: the services we offer are totally free for the user, as FUNDGECKO obtains its income from advertising and its featured products