Business owners with a turnover of up to 100 million NIS"H? A state-guaranteed loan fund begins its activity

The Accountant General announced that as of today (Monday), the new loan fund is open for submitting applications for a state-guaranteed loan for small and medium-sized businesses whose turnover is up to NIS 100 million.

In its new format, 11 different credit providers will operate in the loan fund, with 4 non-bank credit providers (MAX Company, Visa Kal, Gamma Management and Clearing, and BTB), operating at the same time as 7 banks (Bank Leumi, Bank Hapoalim, Bank Mizrahi-Tefahot , Discount Bank, Mercantile-Discount Bank, Jerusalem Bank and Yahav Bank). The purpose of the fund is that the loans will be arranged according to the credit needs of the businesses, for different periods and for a wide variety of purposes. Among them – working capital financing and bridging cash flow gaps, investments, setting up new businesses, growth, setting up additional production lines and investing in industrial development and more. The loans in the new fund will be placed under 8 different loan tracks, including a general track open to all businesses, a track for businesses under construction, a short-term working capital track, an investment track in industry, a farmer track, an exporter track, a social association track, and a green investment track.

As part of the fund, the maximum rate of collateral that credit providers may require as a condition for making a loan has been reduced, along with an increase in the state guarantee rate for each loan. The scope of credit in the fund is expected to stand at 6.4 billion shekels in the first stage, and it will be expanded if necessary. This fund replaces the state-guaranteed loan fund for small and medium-sized businesses established in 2016, which operated through only 4 credit providers. The fund will operate in an accessible and digital way, an application can be submitted using a digital form bFoundation website. The project was led by the Finance and Credit Division of the Accountant General’s Division, headed by Gil Cohen.

The accountant general, Yali Rotenberg: "The state-guaranteed loan funds are designed for the growth of the economy by making credit accessible to small and medium-sized businesses. The funds are the state’s main aid tool for businesses, which are a major engine of growth in the economy. The demand for loans within the funds emphasizes the close cooperation between the accountant general and the financial system in making credit available to small and medium businesses through state guarantees. For the first time, we allow a variety of financial entities to provide business loans with a state guarantee, and this is with the aim of increasing competition, diversifying funding sources, and improving the terms of business loans".

Senior Deputy to the Accountant General, Gil Cohen: "The new loan fund will greatly help small and medium-sized business owners. The state will help them deal with cash flow needs, invest and develop, and at the same time bring about a significant improvement in competition in the credit market, and will allow credit card companies, non-bank credit providers and P2P credit companies to offer state-guaranteed loans. The Ministry of Finance is committed to examining and exhausting every avenue in order to help small and medium-sized businesses, which are a major engine of growth in the Israeli economy".

Non-bank credit easily
Illustration. Photo: freepik

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