Kafalat Loan
 
 
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Kafalat
   
Do you have the ideas and skills and need commercial bank funding at low cost to start a new project or to develop your current business. “Kafalat” and “Kafalat Plus” loans from Bank of Beirut s.a.l. will answer your needs.
 
1- Kafalat Loan:
Purpose of the Loan

• Purchase of machinery and equipment and capital goods
• Plant renovation or expansion, etc.
• Purchase of raw materials, working capital, etc.

Who is Eligible?

• Small and medium sized companies or individual entities (having 40 employees or less), addressing the industry, tourism, agriculture, computer technology or traditional crafts sectors.

Terms of the Loan

• Loan amount: A minimum amount of LBP 4,000,000 up to a maximum LBP 300,000,000.
• Repayment period: Maximum 7 years (depending on the life and purpose of the project), including a grace period between 6 months and 12 months to be settled by equal monthly instalments (principle + interest).

Pricing

• Interest rate:
  In LBP: (Yield T/B’s for 1 year x 40% + 3%) + 2‰ quarterly commission.
If Yield T/B’s is 7.75% => Int. rate is 6.10% + 2‰ commission.

In USD: (Libor 1 year + 5.5%) + 2‰ quarterly commission.
• Cost of the Kafalat loan commission: 2.5% of the amount of the guarantee issued by Kafalat s.a.l paid in advance.
• Central Bank of Lebanon fees: LBP 100,000.
 
Kafalat loan could benefit from interest rate subsidy from the Central Bank of Lebanon up to a maximum of 7% on condition not to exceed the debit interest rate charged on the client.

Required Documents

• Feasibility study with cash flow projection for the duration of the loan.
• Pro forma invoices for equipments or goods to be purchased with the funds borrowed.
• Permit or initial approval from official authorities that authorize applicant to execute his business activity.
• All the other required documents for a credit file, mainly audited balance sheets and income statements for the last 3 years, statements of account from other banks for at least 12 months, supporting documents for the balance sheet and income statement and list of net worth.

Main required guarantees (reviewed on case by case basis mainly):

• First degree mortgage
• Personal guarantee
• Life and fire insurances

The Bank reserves the right to request additional documentation.
 
2- Kafalat Plus Loan :
Purpose of the Loan

• Purchase of machinery and equipment and capital goods
• Plant renovation or expansion, etc.
• Purchase of raw materials, working capital, etc.

Who is Eligible?

• SARL or SAL companies (having 40 employees or less), addressing the industry, tourism, agriculture, computer technology or traditional crafts sectors.

Terms of the Loan

• Loan amount: A minimum amount of LBP 4,000,000 up to a maximum LBP 600,000,000.
• Repayment period : Maximum 7 years (depending on the file and purpose of the project),including a grace period between 6 months and 12 months, to be settled by equal monthly instalments (principle + interest).

Pricing

• Interest rate:
  In LBP: (Yield T/B’s for 1 year x 40% + 3%) + 2‰ quarterly commission.
If Yield T/B’s is 7.75% => Int. rate is 6.10% + 2‰ commission.

In USD: (Libor 1 year + 5.5%) + 2‰ quarterly commission.
• Cost of the Kafalat loan commission: 2.5% of the amount of the guarantee issued by Kafalat s.a.l paid in advance.
• Central Bank of Lebanon fees: LBP 100,000.
 
Kafalat loan could benefit from interest rate subsidy from the Central Bank of Lebanon up to a maximum of 7% on condition not to exceed the debit interest rate charged on the client.

Required Documents

• Feasibility study with cash flow projection for the duration of the loan.
• Pro forma invoices for equipments or goods to be purchased with the funds borrowed.
• Permit or initial approval from official authorities that authorize applicant to execute his business activity.
• All the other required documents for a credit file, mainly audited balance sheets and income statements for the last 3 years (a must), statements of account from other banks for at least 12 months, supporting documents for the balance sheet and income statement and list of net worth.

Main required guarantees

• No securities

The Bank reserves the right to request additional documentation.
   
NB: Kafalat loans are granted for the maximum period of 7 years only once i.e more than one Kafalat loan could be granted, up to the maximum amounts above mentioned; however with the maximum maturity of 7 years starting the date of withdrawal of first loan.

For example, a borrower was granted a loan on Dec-02 for LBP 200 Mio. over 7 years i.e. expiring on 31/12/2009. In case he wants to expand his activity, he could benefit from a loan for max. LBP 100 Mio. (under Kafalat Basic program.) or max. LBP 400 mio. (under Kafalat plus program) over the remaining period, i.e. the last repayment of the new loan must take place by maximum 31/12/2009.