Support programmes for restaurants in Saudi Arabia

Kafalah guarantees part of a bank's financing and does not lend, Social Development Bank and Saudi SME Bank are separate lenders, and Monsha'at classifies enterprise size and offers services but does not describe itself as a lender; each body sets its own terms.

The four bodies at a glance

• Body: Kafalah
• What it does: Issues a guarantee to a lender for part of an enterprise's financing
• Who you apply to: A bank or financier, which asks Kafalah if it needs the guarantee
• What it is not: Not a loan to the merchant

• Body: Social Development Bank (sdb.gov.sa)
• What it does: Lends, mainly through products listed for individuals
• Who you apply to: The bank, online
• What it is not: Not a guarantee body

• Body: Saudi SME Bank (smebank.gov.sa)
• What it does: Debt financing, equity financing and loan guarantees for small and medium enterprises
• Who you apply to: The bank; its site links to a financing portal
• What it is not: Not confirmed as offering a product for restaurants; ask the bank

• Body: Monsha'at
• What it does: Classifies enterprise size and offers services such as training, consultation and pre-qualification
• Who you apply to: Monsha'at
• What it is not: Does not describe itself as a lender

Is Kafalah a loan?

No. Kafalah gives the lender a guarantee for part of the financing. The merchant still borrows from the bank or financier and repays it. The guarantee lowers the bank's risk. The terms of the financing itself, such as the amount, the repayment period and the cost, are set by the bank. Ask the bank for its current terms.

How Kafalah works for a restaurant

1. You apply to a participating bank or financier, either directly or through the financing portal.
2. The bank reviews the application. If it wants a guarantee to cover its risk, it sends the request to Kafalah.
3. Kafalah reviews the request. If it approves, it issues the guarantee in favour of the bank.

You do not pay a fee for the guarantee. The financier pays Kafalah a small annual administrative fee for reviewing and following up the request.

The Working Capital product page states a guarantee of up to 90% of the financing value, with a maximum per enterprise of SAR 2.5 million for a micro enterprise, SAR 5 million for a small one and SAR 15 million for a medium one. Treat these as the ceilings on that page, not as what a bank will offer you. Other Kafalah products may differ, so ask the bank which one applies.

According to the Kafalah FAQ, the programme does not cover personal loans or real estate loans, activities outside the small and medium enterprise definition, or activities that break Saudi laws.

Does Kafalah remove every guarantee?

Not necessarily. The Kafalah FAQ says the owner's personal guarantees are enough to cover the guarantee amount, and that a financier may still ask for additional guarantees when it considers them necessary. A Kafalah guarantee therefore lowers the bank's risk but does not promise that the bank will ask for nothing else. Ask the bank in writing what it will require from you before you sign.

Find your size class

Monsha'at classifies an enterprise by full-time employees and annual revenue. If the two measures give different sizes, the higher size applies.

• Size: Micro
• Employees: 1 to 5
• Annual revenue (SAR): Up to 3 million

• Size: Small
• Employees: 6 to 49
• Annual revenue (SAR): Over 3 million, up to 40 million

• Size: Medium
• Employees: 50 to 249
• Annual revenue (SAR): Over 40 million, up to 200 million

• Size: Large
• Employees: 250 or more
• Annual revenue (SAR): Over 200 million

Example of the rule: a restaurant with 4 employees and revenue of SAR 5 million is small, because revenue gives the higher size. The classification page was last changed on 20 February 2023, so check that it is still current. Monsha'at also issues an Enterprise Size Certificate, which is the document that proves your class. Ask the bank whether it needs the certificate.

Social Development Bank

The bank's home page lists its financing products under individuals, including Cash Financing and Entrepreneur Financing, and each product is applied for online. These are listed as individual products, so do not assume they are restaurant or company products. The page also has an enterprise financing category, but its product details did not appear when we checked. The Cash Financing description mentions people who work through delivery apps; it is an individual product. Ask the bank which enterprise products exist and whether a restaurant qualifies. Amounts and fees on the page apply to those individual products and are not repeated here.

Saudi SME Bank

Saudi SME Bank was established by Council of Ministers Resolution No. 376 of 16 February 2021 to support the small and medium enterprise sector and to deliver its products digitally. Its About page lists debt financing, equity financing and loan guarantees. The start button on that page links to tamweel.smebank.gov.sa, which is probably its financing portal, though the page does not confirm this. The page does not say which products suit restaurants, so ask the bank.

What Monsha'at offers

Monsha'at, the Small and Medium Enterprises General Authority, lists these services on its home page: electronic pre-qualification (Jadeer), the Enterprise Size Certificate, training through Monsha'at Academy, one-to-one consultation and a Vendor Portal for registering as an accredited supplier. It does not describe itself as a lender, though its home page has a category called Financing Solutions, and we did not check what it contains. Use it to find your size class and to prepare, then apply for money at a bank or financier.

Prepare before you apply

• Your commercial registration and commercial permit through Balady.
• Your size class and, if the bank asks, the Enterprise Size Certificate.
• Statements showing your sales, from your point-of-sale system, delivery-app payouts and bank account. See the guide on documents financiers ask restaurant owners for.
• Your VAT position and e-invoices, if you are registered. See the guide on e-invoicing and VAT on delivery-app sales.
• A written list of what you need the money for and how you plan to repay it.

Saleaah (سلعة) offers a separate route for delivery-app merchants: we deduct your financing from your next payout, and no other collateral is needed; see expansion solutions.

Saleaah is not affiliated with or endorsed by any body, provider or app named in this guide. To report a correction, write to info@saleaah.com or message us on WhatsApp at +966550449156.