SMEs Loans

Small and Medium Enterprise Financing.

New procedures have been present by CAB to finance small and medium enterprises (SMEs) that would be capable of generating income, but a lack of funds might deter their development and growth. CAB provides the finance needed for the expansion of existing enterprises, financing operating capital, purchase of equipment, fixed assets, and machines which help in increasing the productivity of ventures that seek to expand and have obvious marketing prospects.

First: Company requirements to be considered a small-sized company:
  1. It should not be a public shareholding, insurance or financial brokerage company.
  2. Its total assets value is less than JOD 1 million or its total annual sales revenue is less than JOD 1 million.
  3. The number of workers is between 5 - 20 workers.

Second: Company requirements to be considered a medium-sized company:
  1. Its total assets valued at JOD 1-3 million or its total annual sales revenue is between JOD 1-3 million.
  2. The number of workers is between 21 - 100 workers.

The financing Features of CAB’s small and medium enterprises are:

  1. A Financing amount of up to 1,500,000 JD, that is in line with the needs and income of the enterprise.
  2. A Flexible repayment period of up to 7 years, including a grace period consistent with the flow of returns.
  3. Several suitable credit facility options which are offered by CAB based on the situation of the applicant:  

 Direct Credit facilities:

Direct cash facilities can be used to fund clients to cover their working and investment capital needs for a short, medium or long term period. Determining the appropriate form of finance required depends on the nature of the business and the purpose of the finance:-

 Overdraft Account:

Overdraft: the Bank offers an overdraft account up to a certain amount for a certain period, renewable with the consent of the customers and the bank, in which the Client is allowed to draw from the overdraft account after signing the facilities contract, between the bank and the   client.

Granting the client an overdraft account, for their businesses which have ongoing cash flows in order to increase the business, industrial, or service in accordance with the limits and specific guarantees agreed between the client and the bank. .The advantages of an Overdraft are that a customer may deposit funds into the account to reduce the balance and the interest incurred on it.

The account should be renewed annually by mutual consent, based on the client’s activity and the account. The interest should be calculated on the basis of the highest daily debit balance and charged on the customer's account on a monthly basis. 

 Commercial loans to financing the working capital needs:

Revolving loans for financing the need for the working capital (raw materials and operating expenses  (  .   

 Refinancing of payments made under a Letter of Credit:

The bank offers letters of credit to clients in order for them to finance their payments for imported goods. Under letters of credit or bills of collection, payments can be made in installments over a specified period.

 Advances and loans for financing of exports:

The Bank offers loans to clients to finance their exports of manufactured goods in Jordan. These loans are usually offset by Import letter of credit from clients and can be given in local or foreign currency as required or instructed by the regulators (the Central Bank). 

 Assets based finance loans:

Loans are granted to multiple targets in order to develop real estate, commercial and housing projects or to simply purchase land. The usual terms of these loans are for a medium-or long-term period between 3-7 years.

 Loans to finance the tenders:

At the request of the borrower, loans are given to contractors or suppliers who are responsible for the construction, maintenance or supply of equipment and services. The borrower must make assignment of proceed to the bank in order to repay the loan with the possibility that proceed can be deducted from the borrower's account based on a certain percentage of each amount.  

  Loans for the medium and long term:

The bank can provide financing to customers who need the funds for such reasons as cars required for work, equipment and production lines for their factories. These loans hold a maximum term of 7 years with an appropriate grace period.

  • Cairo Amman Bank, in cooperation with the Central Bank of Jordan and third parties, supports different sectors by providing them with funding at reasonable interest rates and competitive terms.

  • Cairo Amman Bank also provides guarantees for the facilities it offers under agreements signed by each of the following companies under certain conditions:

    1. Jordan Loan Guarantee Corporation
      Whereby revolving loans and one-time loans are guaranteed for the productive and industrialsectors as well as start-ups. The guarantee rate reaches up to 85%

    2. The Overseas Private Investment Corporation (OPIC)
      Whereby all types of loans, except current debt, areguaranteed.The guarantee rate reaches up to 75%

  • Subject to the agreements’terms and conditions

 Indirect facilities:

Indirect facilities such letters of credits and guarantees are implemented with the clients based on the nature of their activity.

  • CAB provides full ongoing consultancy to its small and medium entrepreneur customers.
  •  CAB helps direct SME customers to areas where professional courses are conducted especially the training of SME personnel in the financial, administrative, marketing, and human resources fields.
  •    The staff of CAB’s SME Department will always be available to lend support and expertise to our customers. Assisting them in answering all their enquiries and even calling on them at their place of business if required.

Documents required from the applicants of CAB for the SMEs loans:

(1)    If the applicant is a company or establishment, the following documents are required:

  •  An up to date certificate of registration, showing the names of partners and people authorized to sign on the company’s behalf, which indicates that the company has the right to take loans from the banks with copies of their identity cards.
  • A copy of the memorandum of incorporation.
  • A copy of the internal regulations of the company must also be provided.

(2)   Whereas, IF the applicant is an individual a valid license for practicing a profession or craft, issued by the Chamber of Commerce and/or the Municipality, with a copy of the applicant’s identity card must be produced.

(3)   Both applicants should provide a bank account statement for the last six months.

(4)   All Documents should prove the availability of funds for repayment: Financial statements for at least the last two years (audited financial statements, unaudited budget, sales tax report, and the enterprise books for review).

Applicants must provide one of the following collaterals which are accepted by CAB such as:  

-          Cash

-          Mortgage

-          Negotiable security

-          Equipment

-          Personal or corporate guarantees accepted by CAB

All these guarantees are subject to the terms and conditions of CAB.

 -    Account managers in the SMEs Department are prepared to come to a clients place of work to help organize the papers and statements required by the Managers of Credit Relations.