Do you want to develop your business in Israel, need cash or want to start your own company? State-guaranteed loans in Israel are for you.

What is a government-backed loan?

The state-guaranteed loan fund has been in operation since 2003 and has helped thousands of SMEs to grow. To date 6 billion shekels have already been granted.

Whether you want to set up a company, overcome cash-flow problems or invest, the loan is granted by the bank, with the government acting as guarantor.

KEY BENEFITS

• 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 1 month.
• 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 SME in any field of activity.
• Loan granted (provided conditions are met) even for start-ups.

State-guaranteed loans in Israel: several options to suit your profile

1. The loan to develop your business in Israel and invest

The fund provides loans to existing companies to help them develop further.

• Loan amount For companies with annual sales of up to 6.25 million shekels, you can borrow up to 500,000 shekels. Companies with annual sales in excess of 6.25 million shekels may borrow up to 8% of their last annual sales.
• The company must provide guarantees up to 25% of the loan amount.
• The borrower provides a personal guarantee for the full amount borrowed.
• Conditions Loan repayment: the loan can be repaid over a period of 5 years, and it is sometimes even possible to repay the first capital instalment as early as 6 months after the date of the loan.

2. Loans to overcome cash flow problems

For companies with cash flow problems to which banks are reluctant to lend money and/or are unable to find investors willing to inject funds into the company to clean it up.

• Loan amount For companies whose annual sales do not exceed 6.25 million shekels, the company may borrow up to 500,000 shekels. Companies with annual sales in excess of 6.25 million shekels may borrow up to 8% of their last annual sales.
• The company must provide guarantees up to 25% of the loan amount.
• The borrower provides a personal guarantee for the full amount borrowed.
• Conditions Loan repayment: the loan can be repaid over a period of up to 5 years, and it is sometimes even possible to repay the first capital instalment as early as 6 months after the date of borrowing.

3. The loan to set up a company in Israel

To promote and encourage entrepreneurship in Israel, the fund grants loans to new entrepreneurs. This solution offers the possibility of borrowing up to 500,000 nis on advantageous terms.

• Warranties : for a loan of up to 300,000 nis, the borrower must provide a deposit of 10% of the loan. For loans of over 300,000 nis, the amount is increased to 25% of the loan.
• The borrower provides a personal guarantee for the full amount borrowed.
• Conditions: possibility of repaying the loan over a maximum of 5 years, and it is sometimes even possible to repay the first capital instalment only 6 months after the date of the loan.

THE LOAN APPLICATION PROCESS

1. The loan applicant must contact the bank of his choice to begin the process.
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 60-85%, 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's 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 banking!

It goes without saying that the company applying for the loan must meet certain conditions in order to qualify for the loan. In particular, the borrower(s) must not be in arrears to the tax authorities, their bank account(s) must not be frozen, and there must be a minimum personal contribution in the case of a loan to set up a company or to invest...

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.