State-guaranteed loans - a solution for the Corona virus in Israel

Maanak Avoda Cabinet Expert Comptable Dray & Dray

State-guaranteed loans in Israel: what are they?

To help companies in Israel affected by the Corona crisis, the State of Israel has decided to set up a state-guaranteed loan in Israel.

What does it involve? Here's a quick reminder:

  1. Loan of up to 8% of your sales in 2019. (They're talking about raising it to 25% of sales for those hit hard by the crisis). Or a maximum of 500,000 Nis for those whose 2019 sales would be less than 6,250,000 Nis. You can choose the most advantageous of the 2.
  2. You will need to deposit 10% as security only. (as opposed to 25% under normal circumstances).
  3. Loan repayment over 5 years.
  4. Possibility of deferring the first loan instalments for 6 months.
  5. Verification of the loan application will take a maximum of 9 days.

Who is eligible for this loan?

Anyone who feels their business is in difficulty:

  1. Order cancellation.
  2. Number of company employees in quarantine.
  3. Impact on production.
  4. Low customer traffic and fewer sales.

ATTENTION: This loan does not apply to companies or for those who would like to use the loan to finance a new investment plan in an existing business!

For these needs, there is another loan formula available. Please contact us for more information.

Which companies are most likely to receive the loan?

Companies arriving at the "Corona" crisis with good financial data!
In other words, companies with revenue reports for the last two years, companies that don't have bad marks with the banks: revenue checks, unpaid invoices, etc. ....

These companies stand a good chance of having their application validated.


  • Particularly suitable for companies that have difficulty obtaining "conventional" loans from banks because of insufficient collateral or too large an overdraft.
  • Loan authorization is granted within 9 days.
  • Repayments spread over a maximum of 5 years.
  • The first repayment of the borrowed capital can be deferred by 6 months.
  • The loan can be granted to any company (Hevra, Ossek Mourche) regardless of its field of activity.
  • Loan granted subject to meeting conditions.


  1. The loan applicant must contact the bank of his choice to begin the process. (There are 4 such banks in Israel).
  2. Applicants must decide which type of loan they are interested in, fill in a questionnaire and present a business plan. These documents will be presented to one of the two organizations in charge of granting or refusing the loan.
  3. This organization will schedule an interview with the applicant, after which it will report its findings to the bank.
  4. The bank studies the organization's recommendation, taking into account the accounting aspects of the application.
  5. Finally, the credit committee makes the final decision.
  6. When the loan is granted, the government guarantees up to 90%, depending on the type of loan requested. For the remainder of the loan, the borrower must provide guarantees set by the bank. Ultimately, it is the bank that decides on the loan interest rate and repayment terms. It's important to bear in mind that there is a negotiation phase with the bank.

You're not alone when it comes to dealing with the banks!

It goes without saying that the company applying for the loan must meet certain conditions in order to qualify. In particular, the borrower(s) must not be in arrears to the tax authorities, and their bank accounts must not be frozen.

So you see, in order to obtain this attractive loan, you have to go through long and tedious administrative procedures, but that's not all. You'll need to draw up a business plan to showcase your company. Above all, you'll need to negotiate with the bank to obtain advantageous rates, reasonable repayments and minimize the collateral required, which requires a certain amount of know-how.



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Tel Aviv

31 boulevard Rothschild


Phone : 02 631 9000
Fax: 02 631 9005
Email : office@cpa-dray.com

Boruch Levenson - CPA

A native English speaker qualified in both Israel and the UK, Boruch cares for the English speaking clients.

If you've got questions, don't hesitate to reach out.

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