Compare the best options on the market and choose the one which best adapts to your day to day needs.
Further Below: Our Guide to Business Loans in Lebanon, Everything you need to know.
1. Cedrus Bank
- Get a loan of up to $ 50,000
- Regressive and variable interest rates
- Favorable loan tenure of up to 60 months
- Laxer free application procedures
- Provides both short and long term loans
- Provides secured and unsecured loans
- Income stability is a factor of consideration
- Attached to fewer file fee charges
- Simpler eligibility criteria
- Fast concessions
2. Federal Bank of Lebanon
- Loan amount starts with a minimum salary of USD 500
- Flat interest rate of 6.67% p.a
- Longer repayment period of up to 5 years
- Loans are granted in LBP or USD currency
- Fast online application process
- Has no salary transfer
- Eligible to clients with income stability
- Loans require collaterals
- Loan purpose is not limited
3. Credit Libanais
- Offers a loan of up to $ 50,000
- Offers loans at varying interest rates
- Favorable repayment period of up to 8 years
- Top financing conditions
- Applicants profile add more features and requirements
- Gives loans for various purposes
- Has online loan application and banking
- Credit terms improve with timely repayments
Business Loans in Lebanon, All You Need To Know:
Take an all round study of everything you need to know about business loans in Lebanon, including the available offers, their terms, and how to compare them to get the loan that best suits your requirements and unique circumstances.
[UPDATE] What economic measures has the Government implemented for companies through covid-19?
Lebanon developed rules and control measures to assist businesses and organizations that were adversely affected by Covid-19. To support all businesses operating in the nation, the government’s policies crossed social, health, and economic boundaries.
- Circular 547 was issued by the Banque Du Libal which issued banks and other financing institutions with zero % interest rate credit line extensions for the next five years on all existing customers who are facing difficulties in making the repayments.
- An 8% increase in corporate bond issuance to widen lending income and sustainability in corporate organizations during the pandemic.
- The Lebanon government established a solidarity fund that took into consideration monetary donations which helped the most affected.
- The ministry of finance extended the deadlines set for the payment of corporate taxes and other fees charged on government services.
- A program that provided financial assistance for lease costs was started by the Ministry of Industry and Trade.
- The government started subsidizing schemes to help a variety of economic sectors that had collapsed as a result of government action against Covid-19, including sports and entertainment, culture, and transportation, among others.
Distinguishing types of company profiles
Before we apply for finance for our company, several things come into play. The character of our company is one important component. The type of loan we can get depends on the features of our company.
What types of businesses are there?
- Entrepreneurs: This kind of company has not yet taken off. The entrepreneur is currently looking for funding to carry out his ambitions but only has a vague idea of the type of business they want to launch. Only minor loans are available to this type of firm.
- Start-ups: Compared to business entrepreneurs, this is a step up. Despite being extremely new and in its infancy, the firm is already operational. The company is now losing a lot of money and requires more capital than it is currently generating in profits. Because of this, it is ineligible for large loans.
- Consolidated companies: As implied by its name, this business is financially sound enough to make large loans. The business generates more profits than losses and has run consistently over the years.
- Large companies: these are the largest forms of business. They have a large scale of operation; national or international and qualify for huge loans (in millions of Euros). Examples of such companies include KPMG, EY, and Pepsi among others.
- As legal entities: This phrase is used to describe people who are operating on their dime and are looking for a loan to finance their venture. Whether they have a start-up or a consolidated business, their degree of income affects their business profile. But the loans they can get are designed for just one individual.
- As natural persons: These are people who earn money on their terms, not through employment. As a result, they use personal loans to fund their entrepreneurial endeavors.
Characteristics of business loans
Depending on the nature of your company’s profile, one form of business loan could differ significantly from another or have certain special features. When you’re looking for finance, you should generally keep an eye out for certain qualities of business loans:
- Cost. When looking for a business loan, this should always be the first consideration. The cost of the loan should be reasonable, with interest rates that are low enough for your company to profit from it. However, keep in mind that loans with absurdly low interest rates are frequently gimmicks and may need you to pay additional fees in the future.
- Amount. Since your financial condition could necessitate a particular sum of money, there is no such thing as a standard quantity for business loans. Therefore, be aware of how much you’re withdrawing and use it to your advantage to make sure your company benefits.
- Purpose. Whether you’re interested in growing your firm, making additional investments, having liquidity, collecting bills, or paying your suppliers, different financial products address various goals. Always be specific on the loan purpose.
- Repayment. The lender may have requirements for how you must pay back the loan, such as monthly payments or paying back the loan plus commissions at the end of the period.
- Linkage. Particularly in banks, finance is always accompanied by ancillary items like insurance, business accounts, or other forms of compulsory hiring.
- Grace period. This is a period during which your lender permits you to skip a month of payments. This occurs in the early stages of the loan when the borrower can benefit the most from it.
- Term. Depending on the type of loan you take out, you may have a different period to repay it. The length of the repayment period increases with loan size.
- Guarantee. This occurs when the lender requests that you provide real estate that will serve as a guarantee for the repayment of your loan. Small loans will never go through this process.
- Speed. It’s crucial to take into account how quickly the lender will transfer the money to your account. Small loans typically result in speedier hiring than large loans.
Where to get business loans
In the last decade, a variety of financial businesses have emerged thanks to developments in financial technology. As a result, new financial vendors have carefully selected various financial services to establish their brands.
The following list of current business loan providers includes:
- Banks: These are the most established lenders. To obtain finance, they must adhere to a set of criteria, such as seniority and corporate solvency.
- Companies and private capital lenders: These businesses have made it possible for borrowers to apply for loans online, completing the entire procedure without having to visit the lender’s offices. Their terms are great, frequently better than banks.
- Alternative financing platforms for crowdlending: These are the kinds of platforms that give the borrower and private investors a direct connection. The decision to invest in or not invest in our business initiative is up to the investor. Once they contribute to our projects, they join our company and receive compensation in the form of revenues. After 48 hours of processing these loans, we can determine whether the investor is interested in our project or not.
Knowing our company’s financial situation and requirements will make it simple for us to determine which type of financing is ideal for us.
Business loan conditions
There are a few conditions that must be satisfied before you can apply for a business loan in Lebanon, as set forth by the government. Before providing you with the funds, every organization will check to see if you meet these requirements:
- National registration: To be regarded as a legal entity in Lebanon, your company needs a national registry. The registration demonstrates that your company is legally permitted to operate and that you are abiding by all business-related laws and regulations in Lebanon. It is against the law in Lebanon to finance an unregistered business.
- Annual income: You will be required to present documentation of your prior years’ yearly income. The lender will assess your financial capabilities and solvency based on this information. Additionally, you don’t want to agree to a loan that will seriously harm your company.
- The seniority of the company: Although different lenders have varied requirements for the firm’s age, most of them will offer to finance if a company is at least a year old. That doesn’t negate the existence of lenders who offer loans to start-ups and fledgling companies.
- Not appearing on the defaulters’ files: If your company has any unpaid loans, it could be difficult to get excellent financing. Before looking for loans, take the time to clear your debts from negative credit files.
Different entities may insert additional, particular requirements that change the aforementioned conditions. Therefore, spend time reading the terms and guidelines provided by the lender.
Documents needed to get funding
Application times for business loans are typically lengthier than those for other loan categories. A borrower will have to present some documents to prove their eligibility, including:
- VAT return from the previous year and the current year.
- Income tax return.
- Bank statement (if in another bank).
- An updated balance sheet of the company’s turnover.
- Proof of payment of Corporate Tax.
These documents can be submitted online, in person, by mail, or by courier.
Other forms of financing for companies
- Business credit lines
We receive a set amount of money from business credit lines that we will eventually pay back. They are different from loans, though, in that we simply have to pay back the principal we’ve already spent. Credit lines allow us to keep the complete amount of money and use it as the need arises. When we have modest, ongoing financial needs but don’t need to continue applying for loans, this form of credit is crucial.
This particular form of financing is intended to assist SMEs or independent contractors who may require money to pay supplier invoices. The lender pays the supplier on our behalf and demands repayment in whole or in equal monthly payments for the amount they spent plus the interest that accrued.
- P2B or crowdlending loans
These are websites that link entrepreneurs and individual investors. Private investors have the discretion to decide whether to invest in your business proposal or not. Different platforms function in various environments and will give us varying sums of money.
These loans are made specifically for suppliers that need money to keep their cash flow stable after collecting and fulfilling orders. The borrower will be obliged to pay back the money they borrowed either in full or in installments after the orders are delivered.
- Loans with mortgage guarantee
These are financial products that we can only use if we can offer real estate as a payment guarantee. A maximum proportion of the property’s appraised worth is represented by the sum we receive. To obtain such loans, one must be patient and go through the drawn-out appraisal procedures.
Products to invest in our company
- Equity crowdfunding
These platforms have recently dominated the financial markets with simpler application processes and quick payouts. These platforms also give the lender, who may be a private investor or a professional, an unlimited selection of projects from which to choose. On the other hand, the borrower receives some funding without being under any obligation to make payments because the investor joins the company.
- Business Angels
These platforms function similarly to equity crowdfunding. In contrast to equity crowdfunding, where the lender is an individual, in this case, Business Angels managers get together and decide collectively which companies to fund. The majority of the time, these platforms finance large projects.
- 3F (Friends, Family, Fools)
These are merely the Fools, Family, and Friends who finance our company. Lender-borrower agreements are informal and may not call for many formalities.
Aid for the financing of companies
- Capitalization of unemployment
This entails obtaining all employment perks available to us and using the money to launch a business. This kind of funding is only accessible to self-employed people who want to launch a firm.
- Subsidies: National, regional or local
The Lebanese government has provided numerous grants and subsidies for business startups, particularly in underdeveloped areas and small business enterprises.
A borrower can discover sponsors on these networks who are enthusiastic about their company endeavors. The platform allows borrowers to promote their ideas so that potential investors may view them and get in touch with them. Keep in mind that the investor will compensate you more if they invest more in your idea.
About this page, our methodology
What this page is for: We are focused on guiding you in choosing the most suitable financing for your needs. We, therefore undertake numerous research in the financial markets to provide you with the most quality information on consumer credits. Similarly, we provide easier steps on the current trends that help you hire the best offer which suits your financial constraints.
Source: The information regarding consumer credits in Lebanon and their regulations have been drawn from The Central Bank of Lebanon, Ministry of Finance websites among other reference sources.
Methodology: The data relating to the conditions of these products (amount, term, interest, etc.) have been obtained through online research and consultation of the official statistics of the aforementioned reference sources.
About Us: FUDGECKO is a website that serves as a reference guide for products related to personal finance and home economics. We provide you with quality information that helps you find an offer that is most compatible with your wants and quirks in addition to comparing the terms of the available offers.Note: the services we offer are totally free for the user, as FUNDGECKO obtains its income from advertising and its featured products.