This type of loan guarantee was set up to specifically support start-ups which demonstrate innovation in the development of a new product or service, of a new production or business process, of new uses for existing products and of new types or modes of distribution or sales channels.
- new or underway projects,
- financing up to 90% of the innovative project cost,
- acquisition of machinery except for rolling stock,
- guarantee: Kafalat guarantees 90% of the loan amount,
- purpose of the loan: supporting innovating start-ups covering:
- new product or service development,
- development of a new production line or a business process,
- development of new uses for existing products,
- development of new types or modes of distribution or sales channels.
- loan amount: from LBP 4 million to LBP 300 million,
- loan period: up to 5 years,
- down payment: minimum 10%,
- grace period: from 6 to 12 months (on capital and interests),
- interest rate: 40% of the 1-year Lebanese Treasury Bills Yield (TBY's) + 3%,
- interest rates subsidized by the Central Bank: up to 4.5% over a maximum period of 7 years,
- Kafalat commission: a yearly 2.5% of the value of the guarantee + 3‰ fiscal stamps for Kafalat commisions (a fee that is charged once),
- client contribution: a minimum of 10%,
- guarantees: Kafalat guarantees the repayment of up to 90% of the outstanding amount to the Bank if the borrower fails to repay. However, the borrower is liable for the whole outstanding amount and not only the 10% not guaranteed by Kafalat.
- beneficiaries: innovative start-ups or existing businesses established maximum 2 years prior to the loan submission date; eligible applicants being capital companies (S.A.L., S.A.R.L.) or cooperatives not having conducted any business operation in the past,
- possibility of submitting the loan simultaneously to the Bank and to Kafalat S.A,L. which is entitled to issue a letter of intent to guarantee the loan,
- purchase of equipment and capital goods (these can be new or used),
- plant renovation, expansion, etc.,
- purchase of raw materials, spare parts, working capital, and consulting fees,
- construction costs (however, the loan should not be exclusively used to cover construction costs),
- marketing promotion activities, such as participation in show rooms, foreign exhibitions, etc.,
- research and development,
- other strategic objectives that serve the interest of SMEs and start-ups.