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 Industrial Loan



1- Registration and Evaluation

Industrial loan applications are accepted in two phases, i.e.:
  • Prescreening Phase
  • Detailed Processing Phase 
Prescreening Phase

A loan application is initially accepted if the following requirements are in place:
  • A valid industrial license. 
  • An exhaustive, recent feasibility study. 
  • For project's cost of less than SR 20 million, use only the small Enterprises Form.
  • Duly completed loan application form. 
  • Details of financial solvency and personal net worth for each partner.
  • Details of the legal entity of the project.
  • The industrial sector is of a commercial viability in the local market.
  • Copies of owners’ ID cards
  • Article of Association (for companies).
  • Electronic copy of the documents submitted.
  • An official authorization form from the project’s owner to the representative of the project to follow up with the fund.​​
  • One detailed quotations for procurement of machinery and equipment.
  • One quotations of raw and packaging materials used for the manufacturing of the proposed products.
  • For existing projects, audited balance sheets of the project for the past three years should be attached. 
  • Engineering drawings illustrating project's layouts, buildings areas, showing locations of machinery &  equipment inside the factory​
  • Provision of minimum necessary documents needed for acceptance of the project file as detailed later, in addition to any other conditions related to the requirement of the industrial sector that is considered important by the fund.

The project representative may contact the SIDF Customer Relations before submission so that our officials could highlight and explain the Fund's requirements.
Detailed Processing Phase
In this phase, the loan application is formally accepted and registered. It is then given a number if the Fund's basic requirements are in place.  Such requirements can be viewed by pressing the following link Documentation needed to complete the loan application file.
Following the acceptance and registration of the application, the Fund will:
  • Assign project processing and analysis to a credit consultant.
  • Assign project technical and marketing review to consultants from the Project Studies & Consultancy Department.
  • Submission of project appraisal report to the Management Committee (for loans up to SR15 million), or the Board of Directors (for loans exceeding SR15 million).
  • The investor will receive a written notice of the final decision in due course.
It should be noted that the evaluation process will be considerably speeded up if sponsors co-operate fully with the assigned consultants to help them evaluate your project.
2- Legal Procedures
Appraisal phase:

In the appraisal phase, the Fund determines the project appraisal costs and prepares an ad hoc agreement. The agreement is then signed with the investor prior to approval of the loan.


Approval Phase:


Upon finance approval by the Fund, a commitment letter is sent to the investor showing loan amount and related details and conditions.   The sponsor will signify his acceptance of the content of the said letter by returning a duly signed copy of the letter to the Fund. Preparation of the loan agreement and the follow-up fees agreement will follow after satisfaction of the preconditions (if any).

Documents necessary for signing the loan agreement are as follows:

1)Original Industrial License Document or a copy stamped by the Ministry of Commerce & Industries.
2)Original of Commercial Registration document or a copy stamped by the Ministry of Commerce & Industries.
3)A copy of the Articles of Association certified by a Notary Public and published (in the case of companies only). The copy should also be stamped by the Chamber of Commerce.
4)A copy of relevant land lease agreement documents or original land title deed.
5)Authorization by the company's board of directors or power of attorney to the individual who will sign the Loan Agreement, related agreements and Order Notes.
6) List of fixed assets of the project including buildings (provide detailed building areas), machinery and equipment (provide a detailed list indicating type, description, serial number and origin), vehicles, furniture and any other fixed assets to be mortgaged.
Following the signing of the loan agreement, the borrower will register a mortgage in favor of SIDF or provide alternative security, or both, according to terms of the loan.   
Loan Disbursement Phase
The loan disbursement takes place after the signing of the Loan Agreement, registering the mortgage, obtaining the required guarantee (if any) and fulfillment of special conditions relating to disbursement (if any).
After review of supporting documents, disbursements of up to 50% are made based on actual expenditure on eligible, financeable costs. 

In order to facilitate disbursement, the borrower must follow the procedure outlined below:
1)Open a separate and independent bank account for the project.
2)Maintain basic accounting records for the project.
3)Establish and maintain a proper filing system for all documents supporting recorded costs (contracts, invoices, receipts, shipping and custom documents, bank statements, etc.)
4)Employ a qualified accountant for the project. Once SIDF approves the loan, the accountant must visit SIDF and meet with one of the officers in the Audit Division who will supply him with the requisite format and instructions for preparation of a disbursement request file for SIDF.
5)Avoid payment of cash for any part of the project cost.
Note: If the actual project cost is less than the budgeted cost, the Fund will reduce the loan proportionately and an explanatory letter to this effect will be attached to the Loan Agreement.
Loan Repayment and Follow up Phase
The loan is repayable according to a schedule shown in the Loan Agreement and the borrower must repay the loan installments according to the Loan Agreement. The fund, represented by the concerned consultant, will follow the project's performance through the financial information supplied by the borrower and through periodic contacts and site visits to the project until full repayment of the loan.  



The documentation needed to complete an application file is as follows:
1) A copy of the Industrial License.
2) Details of the Civil Status Record (National ID) of the project owners.
3) Detailed and recent feasibility study (should not be more than one year old from the date of the loan application) in Arabic or English. In preparing the feasibility study, guidelines in Section-2 should be followed. ) (The essential purpose of the study is to demonstrate clearly and in detail why the project is feasible).
4) A copy of the Commercial Registration (If the Commercial registration has not yet been obtained, a copy of the draft articles of association may be acceptable as an interim solution).
5) A copy of the land lease agreement for the proposed site in the Industrial City, or the land title deed in case the proposed site is out of the Industrial City.  For projects intended to be erected on leased private parcels of land, a copy of the lease contract should be submitted. However, the terms and conditions of such lease contract should be acceptable to the Fund. A copy of the municipality, or other competent authority of the region where the project will be erected should also be submitted.
6) Three quotations for machinery and equipment from different sources showing detailed prices and specifications. Catalogs for the machinery should also be submitted.
7) Full set of the building drawings including machinery layout.
8) Three quotations for the buildings and civil works supported by bill of quantities.
9) Three quotations from different sources for raw and packaging materials used in manufacturing the proposed products.
10) If there is an agreement with another party for know-how, management, licensing, marketing and distribution or any other form of agreement related to the project, a copy should be included.
11) For expansion, modernization or replacement of machinery for existing projects, audited financial statement for the past 3 years must be submitted.

Important Note: The first four items constitute the minimum required for accepting the project file. In case of unavailability of these items, the project file will be rejected, As for items from (4) thru (11), detailed reasons for any missing item of them should be provided, taking into account that such documents are essential parts of the study. Missing items would  culminate in delayed evaluation or eventual termination of the application.