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Kafalat Start-ups and Innovation

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.

General conditions
  • new or underway projects,
  • financing up to 50% of of innovative projects,
  • acquisition of machinery except for rolling stock,
  • guarantee: Kafalat guarantees 85% of the loan amount for conventional start-ups and up to 90% of the loan amount for innovative start-ups,
  • 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 characteristics
  • loan amount: from LBP 4 million to LBP 650 million,
  • loan period: up to 7 years,
  • down payment: minimum 50%,
  • grace period: from 6 to 12 months (on capital and interests),
  • interest rate incurred: 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: minimum of 10%,
  • guarantees: Kafalat guarantees the repayment of up to 85% of the outstanding amount to the bank (for conventional start-ups), and up to 90% (for innovative start-ups), if the borrower fails to repay. However, the borrower is liable for the whole outstanding amount and not only the percentage not guaranteed by Kafalat.

  • beneficiaries: maximum 2-year-old Joint Stock companies (S.A.L.) not having conducted any business operation in the past,
  • 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 start-ups.

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BDL Approval No.: 729/cc/17 Dated: 13/08/2014