Despite the doom and gloom we read about SMEs (small and medium enterprises) struggling to access funding or pay it back due to the current challenging business environment, there are many factors painting a promising picture for business owners in the UAE.

These include supportive regulation for SMEs, an increased focus on qualitative measures of creditworthiness, and the huge opportunity brought around by Expo 2020. Many of the SMEs that we speak to consider Expo 2020 to be a significant factor in their decision to apply for finance.

The event has proven to be a key driver for business in previous years, and winning the bid to host it in the UAE has led to a stimulus boost to fund a significant amount of infrastructure development in the coming years. This creates a vast array of opportunities for SMEs.

While most SMEs are not directly involved in the development of Expo 2020, a large number are involved further down the supply chain and are in discussions with suppliers. Expo 2020 might not be the answer to solving the challenging economic environment, but it confirms that there is physical stimulus on the horizon, which will benefit the wider economy.

It is important SMEs in the UAE consider the long-term opportunity that is available to them when deciding whether or not to access finance for growth. Last year was a cautious one for businesses due to the falling oil price and cuts in government spending. But markets are built on confidence and the future looks bright for well-run businesses that are ready to take advantage of the opportunities available.

Even more importantly, there are several measures that businesses can take themselves, to improve their funding strategies when times are tough. For any SME, there is a fine balance between having ambition for growth and maintaining the bottom-line. Businesses need to take risks, but they also need to stay profitable.

Lenders start to raise red flags when they are approached by companies with too many banking lines — a common feature in the UAE, in comparison to Western markets. SMEs rely on debt and trade finance lines to finance their growth. But having multiple credit line makes a company vulnerable to a chain reaction if just one line is pulled.

In March, the UAE Banking Federation (UBF) revealed a plan to launch a loan-restructuring scheme for indebted businesses that have finance agreements with multiple lenders, where the lenders work together to help firms to reduce their debt burden. This is a positive step towards the UAE’s long-awaited insolvency law, and will provide more repayment options for SMEs in troubling times, reducing the fear associated with accessing finance.

However, one of the main setbacks for SMEs when looking for funding is not being able to articulate why they need the cash. Lenders of all types, whether banks or online peer-to-peer lending platforms like Beehive, want to feel confident that the money they issue can be paid back. The best way for a business to instill this confidence is to communicate a clear motive and a six to 12 month strategy that explains how they will create a return, whether it be through hiring new staff, buying new stock, or renting more office premises.

Equally important is the ability to provide audited accounts that back their strategy. All too often SMEs do not have all the necessary paperwork needed to support an application. But this is mandatory for the funding process, and gives additional credibility in a challenging market.

It is also important for SMEs to approach lenders that focus on qualitative measures of creditworthiness, as well as quantitative, when developing their credit reports. This means lenders that examine character and projected growth, rather than focusing on collateral, such as property or large assets.

This is especially true for SMEs in the digital knowledge sector that struggle to access finance due to a lack of tangible collateral. These businesses are generally extremely asset-light but have strong brand equity and intellectual property assets. Conventional lenders with established credit processes are often unable to measure this value.

However, smaller lenders such as crowdfunding platforms have the agility to project future growth by examining an SME’s cash flow, the opportunities available in their industry, and how their operations are run.

In today’s challenging market, and with the growth of digital businesses across the UAE, more and more SMEs will rely on a qualitative method of credit checks to access finance. But at the same time, they can improve their chances by articulating their funding strategy well, maintaining clear accounts, and keeping their banking lines to a minimum.

By following these simple steps, SMEs can prepare themselves to reap the huge economic benefits that events like Expo 2020 will bring to the UAE.

The writer is the Founder and CEO of Beehive, the online peer-to-peer finance platform.