How to Finance Your Project?

Securing financing is one of the most significant challenges facing projects in the Arab world, where access to capital often determines whether a venture survives or fails. Across the MENA region, small and medium-sized enterprises (SMEs) account for 96% of registered companies and generate around half of total employment, yet they receive only 7% of total bank lending—the lowest share globally. This imbalance has created a $5.2 trillion financing gap, representing nearly 88% of unmet demand.

The impact of this gap is severe. High capital constraints continue to drive elevated failure rates among early-stage ventures. In Saudi Arabia, for example, venture capital funding fell 70% year-over-year in 2024, dropping to $700 million amid broader economic pressures. As a result, many promising startups collapse not because their ideas lack merit, but because they fail to secure sufficient early-stage funding.

Step 1: Understand the Funding Reality

Entrepreneurs must recognize that traditional bank financing is limited and highly competitive in the region. Relying solely on loans is often unrealistic, particularly for early-stage businesses.

Step 2: Plan for Early Cash Needs

A clear understanding of cash flow requirements—especially during the first 12 to 18 months—is critical. Many ventures fail simply because they underestimate how long it takes to generate sustainable revenue.

Step 3: Explore Alternative Financing Options

Given the funding landscape, founders should consider diversified sources such as angel investors, venture capital, government-backed funds, accelerators, and strategic partnerships, rather than depending on a single channel.

Step 4: Prepare for Capital Scarcity

In an environment where capital is tight, financial discipline, lean operations, and realistic growth plans are essential. Businesses that plan for scarcity are more likely to survive and scale sustainably.