Cost of the Loan

Interest Rates

Kafalat Start-ups and Innovation loans may be granted in either Lebanese Pounds or US Dollars.

Loans taken in Lebanese Pounds (LBP) will be charged the following interest rate:

Interest rate = 40% of the 1 year Lebanese Treasury Bills Yield (TBY's) + 3%

Loans taken in US Dollars (USD) will be charged the following interest rate:

Interest rate = 1 year Libor + 5.5%

Subsidy

The interest subsidy is the same for all subsidized loans, currently at 4.5%. The duration of the subsidy is maximum 7 years.

Kafalat Fee

The Kafalat fee consists of a 2.5% yearly commission of the outstanding value of the guarantee. The value of the guarantee is 85% for Start-ups and 90% for Innovative SMEs of the loan value approved by the bank and Kafalat.

Fiscal stamps are charged once on the Letter of Guarantee and are calculated at 0.3% of the value of the guarantee.

Therefore, the final cost at Letter of Guarantee issuance would be equal to:

[(Loan Value + interest accrued during grace period + interest accrued for 3 months) x (85% or 90%) x 2.5%] + [(Loan Value + interest accrued during grace period + interest accrued for 3 months) x (85% or 90%) x 0.3%]

Additional Fees

A one time file fee may be charged by the bank (Maximum 400,000 Lebanese Pounds).