The markets in the UAE were suspended for two days until March 1, 2026 following the outbreak of war across the GCC on Feb 28, 2026. Enough said on geopolitics for founders, at least for the time being. You now need to start thinking about the implications for your business, whether in a week, a month or a quarter.

The fear is real. I have heard over and over from clients that receivables are being delayed, investors are getting nervous, and management is being bombarded with "what if" questions from staff that they do not have answers to. Fear is understandable, but you have been in tough spots before. Not this one, but close. You made it through COVID, adapted to VAT and rebuilt, reorganized and renegotiated the global supply chain to keep production going, pay staff and revenues flowing. You can do it again.

Reality check, not hypothetical, not apocalypse, just real. Here is a rapid snapshot of the current state of the UAE economy, the 5 biggest financial risks for SMEs in the current market and a week by week playbook to get you prepared and ready for the next 30 days.

What's Actually Happening to the UAE Economy Right Now

You can't protect what you can't discover. First, you need to understand the vulnerability of your organisation. This has nothing to do with some doomsday scenario you read about in the media. It's about discovering your own level of exposure.

Macrobunching in the UAE, short version The short version: the UAE's macro position is unusually strong. We read that in a 4 Feb 2023 note S&P Global Ratings said that tourist, trade and investment flows were likely to remain soft in the near term due to ongoing geopolitical tensions in the Gulf, but the UAE would bounce back quickly as the pressure subsided, supported by a large balance sheet and a diverse economy.

Rating Abu Dhabi to 'stable' is important. Our estimate of Abu Dhabi's net asset position (ANA) relative to GDP is around 358% in 2026, which offers a large cushion against potential shocks to the economy, one of the largest among sovereigns.

So what does this mean for SMEs in the UAE? The UAE government is here to stay. The infrastructure of sovereign wealth is robust and unlikely to change. The diversification of the economies of Dubai and Abu Dhabi away from hydrocarbons into technology, finance, logistics and tourism means that the economy is less volatile than it was 20 years ago.

The risk that you should worry about as a founder is not the macroeconomic risk of a depression, its the business level risks that are triggered and become visible in a depression-like environment. We will talk about those next.

The 5 Biggest Financial Risks for UAE SMEs Right Now

Every organisation will be impacted in a different way by a crisis and the initial shock will be influenced by the pre-existing vulnerabilities. We will examine the main areas where start-ups in the UAE are currently most at risk.

1. Cash Flow Gaps

Customers are the biggest obstacle to prompt payment. What used to be a 30 day receivable is now a 60 day receivable and we are getting asked to receive prepayment for our products and services. Our customers have all come down with a bad case of invoice blindness and no matter how much money we are making, it isn't coming in when it needs to. What we have is a cash flow crisis that has nothing to do with supply and demand and everything to do with when the money is due and it can be fixed.

2. Supply Chain Cost Spikes

Supply chain notes, Import costs are rising, transit times are lengthening and with the global impact of various events, particularly on ocean and freight capacity, suppliers are starting to pass on increased costs to customers for businesses that are heavily reliant on international freight. While this is not unexpected, it can be mitigated by negotiation with suppliers, through the use of derivatives or by reviewing and expanding the supply chain.

3. Currency Exposure

Our AED is pegged to the USD, so at least that is some stability. If a large portion of your costs are denominated in the EUR, GBP or INR, you might not fully appreciate the impact of currency risk. Unfortunately, it is always cheap until it is too late. Now is probably a good time to have a think about your exposure.

4. Client Churn, Especially Expat-Owned Businesses

Recent developments suggest that some of your clients may be rethinking their regional strategy. Expats, and global businesses with operations in the Middle East, foreign businesses that invest here tend to act rapidly in periods of heightened political tension. Client concentration risk occurs when your top 3 clients account for 60%+ of your annual revenue. It's a problem that has a solution. We will help you identify that solution in Week 1 of this playbook.

5. Investor Hesitation

Geopolitical tensions are causing more uncertainty and higher costs for all risk takers, including investors. Mid-raise rounds will simply take longer to complete. And for companies living from one funding round to the next, this is probably their biggest risk management challenge ever. It's manageable, but only if they act before their cash run out.

Your 30-Day Financial Crisis Playbook

These are action items that you can pick up and run with on Monday morning. The founder that emerges unscathed from a true crisis is not the one with the most money. It's the one that acts and communicates most quickly and effectively.

✦ Week 1, Know Your Numbers

Your first job is a complete picture of where you stand. No assumptions, no estimates, pull the actual numbers. So, let's start with the runway calculation: How many months of expenses are covered by the cash you have on hand? If it's less than 4 months, you have work to do to get your situation under control.

• Cash on Hand / Average Monthly Runway Pull your runway calculation: months of expenses covered by current cash on hand
• Document your top 5 receivables and assign a payment probability to each (high, medium or at risk)
• Freeze non-essential subscriptions, discretionary spend, and any deferred purchase decisions
• Map your fixed vs variable costs, this gives you your levers

✦ Week 2, Protect Your Cash

You now know where you sit on the runway. The next step is to stretch the runway and to get a better sense of your burn rate and cash balance. Do not assume you will need a credit line. Reach out to your bank now and find out their views on lending to start ups. You will be in a far better position as a founder if you have proactively engaged with the bank than if you are trying to negotiate a loan or credit line when you are in trouble.

UAE Banking Tip: Get in touch with your bank to find out if they will increase your credit limit. Do not leave it till the last minute as it should not become an emergency.

It is important to review all of the contracts you have entered into to determine if a force majeure clause has been included. A force majeure clause is designed to provide specific terms and conditions for each party in the event that performance of their respective obligations is either prevented or rendered more difficult due to a force majeure event. These provisions can be very lengthy and will refer to a multitude of events that are considered to be outside of the control of the parties.

• Delay major capex decisions by 60 days unless they are directly revenue-generating
• Do you have any foreign currency receivables that you have yet to exchange? We would like to inform you that there are still favourable exchange rates for exchange of foreign currency receivables into AED.

✦ Week 3, Communicate Proactively

This is Uncertain Times: Week Two. Uncertainty is contagious and silence is chaos. This week we are going to focus on communication. Companies that lose customers during a crisis are not generally bad businesses, they simply fell to fall silent. Communicating with vendors and colleagues is also important and will be touched upon.

• Email key clients reassuring them of service continuity, short, direct, and confident
• Renegotiate payment terms where possible, proactively ask before clients ask you
• Let your team know what is unknown, what you are doing about it, when they can expect an update and remember that clarity is leadership. Identify the uncertainty, describe the actions you are taking and when you will next report on the situation.
• Review vendor agreements and explore deferred payment options with strategic suppliers

✦ Week 4, Scenario Plan

The best crisis leaders are rarely the most optimistic. The best are instead the most prepared. Scenario planning forces leaders to imagine what a severe recession would look like and enables them to prepare accordingly, so that when a downturn finally arrives they are not as taken aback.

• Practice Modeling a Business and Running Scenarios Create a 3-Scenario financial model for this business. Your base case should reflect the current business, and you should include scenarios where revenues are 20% and 40% less than the base case.
• Financial projections, Break-even analysis Calculate your break-even point, the minimum monthly revenue required to cover all fixed obligations.
• Variable vs Fixed Costs Variable Costs: Definition Fixed Costs: Definition The key costs to consider when thinking about adjusting to changes in demand are your variable costs. These are your flexible costs.
• If you are under time pressure and the position is becoming complex, try to establish priorities for your first three moves. Remember that the decisions have already been made and you can react more quickly to the position.

Have a question about the model? Our CFO Advisory service will give you a complete financial picture and we can have a team of modellers building out scenarios like this for you in 48 hours or less.

What Finanshels Clients Did During COVID That You Can Do Now

It has all happened to our clients and we have seen it with our own eyes. With all the lessons that COVID-19 has taught us, we have now gone full circle as we have seen companies fall apart in a matter of weeks and as we have seen companies emerge stronger than ever. Yes, we have seen it all, no matter the industry, no matter the product or no matter the size of the company. The one thing that really matters is the quality of the accounting and financial information that the entrepreneur has to work with.

The businesses that survived had three things in common:

• Their accounts were balanced and in order prior to the COVID-19 pandemic, so when it hit they were ready to go. They hadn't just sat down with their bank to discuss their assumptions for future trade flows, nor were they just trying to model the future estimates of trade flows that they had promised to the bank in advance of a market that was rapidly changing. They were able to access their banking accounts for at least 2 to 3 weeks before their competitors who were having to spend more time sourcing historic data to make their accounting estimates.
• They had real-time information at their fingertips, not monthly reports. The government could decide to change policy overnight and the customer could change their behaviour in a matter of days and they could act in days rather than weeks. Companies with a quarterly mindset were unable to react.
• A finance partner was really useful. As founders you want to be getting on with running the business, not worrying about things like VAT returns and lease agreements. We didn't want to have to spend half our time dealing with those kind of things. It was really helpful having a finance partner who could do that stuff for us. It was a really good use of our time in a stressful period.

Every so often we hear of companies who claim that the adverse impact of COVID-19 was unexpected. Unfortunately such companies have poor accounting practices and these have been exposed by the unusual events of a crisis. While a crisis does not create accounting and bookkeeping problems, it will highlight where the practices currently in place are inadequate. Fortunately the accounting and bookkeeping practices that need adjustment are generally those which are required to cope with everyday business events. They therefore can be fixed. Here is where to begin.

Read our guide to how founder financial clarity can support operational resilience. Find out how to best support the wellbeing of the founder in a period of tight finances. Read our guide to the costs of auditing in the UAE and how to reduce them.

Government Support Available for UAE Businesses Right Now

One of the very few advantages we've seen of doing business in the UAE is that the government has actually taken the whole "supporting SMEs" agenda seriously, which is more than can be said for most countries who just use it as a marketing slogan. There are loads of actually quite useful programmes and initiatives to help them out, but none of them seem to be being used to anything like their full potential. Primarily because nobody seems to be aware of them, or because it's just so much hassle to even try and figure out who to talk to, or what the best way is of actually getting anything done.

The Department of Economy and Tourism, Dubai SME is responsible for providing financial aid, consultancy services and access to government tenders for small and medium-sized enterprises. It can also be turned into a centre that can be quickly activated in the event of a crisis to provide financial aid within weeks.

New measures by CBUAE lending support mechanisms The Central Bank of the UAE has always stepped in by launching economy stimulating measures whenever any regional crises occurs. With respect to COVID-19, the TESS programme which was launched earlier by the CBUAE had a complement of AED 50 billion provided as liquidity support to the economy. It is recommended to confirm the details of the new measures and to get in touch with your bank to determine if they will be able to service your business activity.

Part of the Abu Dhabi Economic Vision, Abu Dhabi's economic blueprint, also focuses on ensuring the resilience of the SME sector, while supporting the diversified economy of the long term. There are also various grants and forms of support available, which vary according to the type of business activity.

From all previous crisis' experiences we know that the early moving SMEs will get the largest share of the public aid given out by the authorities. The schemes are always filled to the brim, and the application period, although always quite short, always seem to open and close very quickly. This means that all SME's need for support is equal, but the support given to the early movers is always larger than to those that move later. By acting early in 2026 you will have a full year (2026) to prepare, develop and strengthen your organisation. So now is the right time to apply for support.

FAQ, Your Crisis Finance Questions Answered

Q: Should I delay hiring during regional instability?

This really is a matter of your own individual circumstances. Consider your runway, and the role that the person you are thinking of hiring will play in your revenue stream vs expenses. I believe that in today's market a salesperson that can pay for themselves in 60 days or less is more justified than ever before. On the other hand, if a hire simply increases fixed costs without any near term benefit to your sales, then it is probably better to hold off. Hiring decisions should not be made based on the state of your business at any given time. Rather they should be made based on the financial position your company is in relative to that hire, after a potential decline of 20% or more in your revenue. Take a moment to create your scenario and decide how you would act.

Q: Should I move my business accounts to a different bank?

The banking sector in the UAE is heavily regulated by the Central Bank of the UAE. With the very low likelihood of systemic risk to any bank in the UAE, a crisis is also an excuse to not put all your eggs in one basket. Hence, we strongly recommend having a secondary bank account in case of an emergency. There is no need to use it.

Q: Is this a good time to raise prices?

The answer is sometimes yes. If costs have escalated dramatically and you have customers under contract, then you may be in a position to discuss price increases based on a significantly increased cost base. This is far removed from the peak of the cycle and may be more understandable to customers. The major risk is that customers will not take the increase in good part. In this situation you should lead and end with the cost increases that you are incurring, spend some time discussing the phasing of any price increase and deal with necessary explanations as you go in order to ensure that customers understand the reason for the price increase and receive as much disclosure as they would expect.

Q: What should I tell investors right now?

Communication is key! It's essential to notify investors proactively and ahead of time of any questions they may have. It's likely that the most effective approach will be to send a one page note addressing the following:

• Current cash balance and burn rate
• Any material changes to sales pipeline or revenue projections
• Any counter measures that the business is undertaking
• 60 day revenue forecast

Informing investors ahead of them having to come and ask for an update on any COVID-19 issues will likely yield a far better response.

Q: How do I calculate my real runway?

Real runway = current cash balance / average monthly cash burn The real word in this phrase is real. Most founders have what we call 'imaginary runway' where they plan their future cash burns based on revenue projections rather than actual cash in. We want you to go back and look at the last 3 months of bank statements and work out the average monthly net cash outflow. Then simply divide your current cash balance by that number and if your answer is less than 4 consider this one of your number 1 priorities. Read our guide to startup runway in the UAE to find out more.

The founders that make it out of this alive won't be the ones with the deep pockets.

The unclear will not be those who were unsure of the events that have taken place. The unclear will be those who were clear headed regarding their financial situation, the nature of the risks they faced from their customers, which variables to adjust and in which sequence and who were able to make the necessary judgments and take the required actions in a timely manner.

Finanshels helps UAE founders clear the fog. Finanshels creates clarity for UAE founders. Real-time financial visibility with a modern financial dashboard, so you can see the state of your business today, not last month. A team of CFOs that understand the intricacies of SME finances in the UAE, as well as the complexities of the local laws and market. And, a partner who is always available when you need them.

Did you know that you can easily find out what stage you are at with your finances? Check it out with my top tip and get your FREE financial health check from Finanshels here →