How to secure funding for your project without falling victim to scams?

Are you looking for financing for your project? I will talk about some important points and conditions for obtaining financing. I will also mention a common scam in this field... be careful and warn others if you can.

Firstly: There are different types of financing. There is financing for established projects and for new projects. Today, I will talk about financing for established projects only, and I will discuss new projects in detail in the future. However, I want to clarify here that:

There is no financing available for new projects outside of the Kingdom yet, and anything that comes from offices or brokers claiming that there is financing in the millions is simply a scam and a way to trap the loan applicant. Even if they tell you that you are not obligated to pay any amount, I will explain the scam method. Remember the constant saying: "Nothing grows in shame except from the seeds of greed." Don’t be greedy for millions; stay realistic and logical. Bank facilities can be divided into two types:

• Cash facilities, such as social advances, overdrafts, and short-term and long-term loans.
• Non-cash facilities, such as letters of credit and guarantees.
• 
  

Today, the discussion will focus on cash facilities, their conditions, and the main goal here is to clarify the general conditions. Secondly, we want to send a clear message to small business owners that there is no financing from any bank or company outside the Kingdom without these conditions, and anything contrary to this is an attempt at fraud.

Most banks and financing companies require financial statements from 1 to 3 years, and they must be audited by a certified public accountant. The better the accountant’s reputation, the better the situation. Some funding entities do not require financial statements because they are only targeting real estate collateral. Bank statements for a period of 6 months to a year.

Here, we want to clarify to you as a business owner… try to ensure that your sales and business activities are clearly visible on your account. You might lose the opportunity for funding in the future if there’s no clear activity on the account. A profile for the company and project, along with all government documents such as commercial registration, articles of incorporation if it’s a company, and all government documents including the founders' IDs.

The real estate deeds that will be pledged against the loan. Here we want to clarify that the property value ranges from 50% to 75% of the loan amount. The 50% to 75% of the loan amount depends on the property evaluation, and you do not need to perform the evaluation yourself, as the financing company will have certified appraisers to do the job for you. There is an administrative fee paid upfront, which is 1-2%, and it is sometimes refundable,

but its purpose is to show the seriousness of the loan applicant. The financing (murabaha) rate is between 4.5% and 13%. It’s important to clarify that you should ensure that the company you deal with has a Shariah board. The scam method: Many clients contact me saying they want a feasibility study to get financing from abroad for huge amounts reaching tens of millions. When I warn them, they say that the companies do not ask for any money,

but I will explain the scam method. Most of the time, these companies are based in London, and the process usually goes like this: They ask for a feasibility study, then evaluate your project within a week and approve the amount. They ask you to open a company in London to obtain the loan. You’re left with only opening a company and opening a bank account to become a millionaire. At this point, you either travel to open the company,

or they will choose a lawyer to help you open the company, and this is where the scam happens. These scammers deal with millions of clients. Imagine that millions of emails are sent, and when you respond,

they contact you personally to reach the final plan. If you decide to travel and open the company, you will lose a lot of money, and the scammers will disappear immediately. You might think that $5000 is a small amount compared to $10 million,

but imagine they target 100 clients a year. 100 * $5000 equals 1.75 million riyals just from emails and phone calls, and two people in an apartment. Always remember: "Nothing grows in shame except from the seeds of greed." Work hard and aim high, but do it the right way. I wish you successful ventures in the right way.