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 Israel, Everything you need to know.
Bank of Jerusalem
- Offers loans of up to NIS 150,000
- Loan repayment tenure of up to 10 years
- Offers variable interest rates based on loan amount
- Excellent loan terms and conditions
- Unlimited loan purpose
- Applicants with stable incomes are considered
- The cash is granted within 24 hours
- The money is given as a lump sum
- Eliminates additional fees on repayment
Israel Discount Bank
- Get a loan of up to NIS 100,000
- Attractive and fixed interest rates
- Repayment period depends on the loan taken
- Offers both short-term and long-term loans
- Quick paperless application
- Offers both secured and unsecured loans
- Creditworthiness is a factor of consideration
- Seamless loan conditions
- Best applied with a stable source of income
- Get a loan of up to NIS 30,000
- Flexible loan repayment term of up to 72 months
- Offers interest-free loans
- Fast online application process
- Applicants should have a stable income
- Guarantors are required for security
- Loan disbursement is within 7 working days
- Offers loans for various purposes
- Excellent loan conditions
Business Loans in Israel, All You Need To Know:
Before contacting a business credit, we conduct a thorough analysis of the market conditions influencing consumer credits and provide you with all the necessary information, such as the forms of credit or grants, which documents to submit, and how to obtain the best business loans currently available:
What economic measures has the Government implemented for companies through covid-19?
The Israeli government stepped up during the pandemic to protect small and medium-sized businesses, big businesses, and independent contractors from its negative impacts. To guarantee that all economic sectors survive the crisis, the administration put in place several economic measures on March 27, 2020.
- The Israeli government drafted measures on tax relief by extension of tax submission deadlines, enforcement actions were paused, and increasing employment rates in the labor industry.
- A special loan facility of up to NIS 500,00 loan limit was enacted for SMEs that were much affected by the pandemic on 8th March. These funds were obtained from the State Guarantee Fund. All mandatory payments made by SMEs and self-employed persons were postponed.
- The Central bank of Israel in collaboration with other banks announced the deferment of loan and mortgage payments for three months. This includes waiving all fees attached to deferment.
- A support package program of NIS 10 Billion was authorized for SMEs to ensure sufficient cash circulation. This increased the loan limit offered to 85% and collaterals offered for security were reduced to 10%.
- A grant of NIS 9 Billion was offered by the government to provide relief for economic services. By this, payment of VAT, water bills, and electricity was postponed. This grant also facilitated property tax grants on businesses with an annual turnover of NIS 100 million were refunded property tax expenses.
- Leverage funds of NIS 4.5 Billion were established to facilitate the government and institution bodies’ joint investments which raised funding for commercial activities in Israel.
- The Ministry of finance declared the release of the State Loan Guarantee Fund of NIS 7 Billion for large companies. This allowed an increase of the loan repayment period to 5 years with a grace period of 1 year. These measures apply only to organizations that join the fund.
- The government facilitated relief measures for NGOs and other Non-profit making organizations that were severely affected by the pandemic.
- The government issued a NIS 2.6 Billion business grant to facilitate discounts given to businesses that pay council tax. These businesses include; the hotel industry, factories, and trading industries.
Distinguishing types of company profiles
Your business profile is one of the variables that determine how much money you can get for your organization or company. The traits of your business profile have a significant role in determining the processes and type of finance you receive. Different business profiles come in many forms:
- Entrepreneurs: This kind of business has not yet come into existence. Instead, it is merely a concept that has likely been planned for and is awaiting funding to become an actuality.
- Start-ups: Due to the numerous restrictions placed on business loans, this type of company may not always be eligible for finance. Start-ups are actual companies that have just begun to grow. They could still be having sustainability issues.
- Consolidated companies: Because they have a reliable operating system, consistent revenue, and a history of operation, these businesses will have no trouble obtaining business loans as their characteristics inspire some kind of trust in lenders to finance them.
- Large companies: their level of operation is either national or international. The financing needs are also huge, mostly in millions of Euros if not billions. For instance, Mizrahi Tefahot, Israel Aerospace Industries(IAI), and IBM Israel among others.
- As legal entities: They are operated by independent professionals, and their businesses may need funding. Depending on how well-established they are, their entities might be categorized as start-ups or consolidated businesses. However, the loans their company is granted will be seen as being made by a single person.
- As natural persons: These professionals take out personal loans to finance their endeavors, such as purchasing a home, a car, or other items. In addition to their jobs, they also rely on other sources of money.
Characteristics of business loans
As discussed above, the type of financing that your company is eligible for depends on your business profile. The qualities listed below should be considered regardless of how particular the loan choice you choose is because they apply to all loans.
- Cost: The cost of a loan varies depending on the entity. This requires you to think creatively and compare as many possibilities as you can to select the most amiable choice. A company loan can be obtained in Israel because of its relatively solid banking and financial institutions. However, the lending rate as of 3rd October 2022, was 2.75%. This shows a significant rise due to the hiking of inflation rates in Israel.
- Loan amount: Determine the loan amount you require for your business and search for that amount only. However, the quantity of money you get will also depend on the kind of business profile you have. Larger businesses typically obtain more funding than startups.
- Repayment: Your loan type may require you to make payments in monthly installments, quarterly, or yearly while in other cases, you may have the option of repaying the whole loan amount plus the interest and commissions accrued at the end of the term.
- Purpose: The reason why you want a loan differs from one loan application to the other; It could be to expand your business, make purchases, consolidate other business loans, clear arrears with your distributor, or finalize major projects among others.
- Term: the time you take to repay a loan will vary with an entity as well as the amount of the loan. Generally, big loans tend to have longer repayment periods, running up to 15 years while small loan amounts may have shorter repayment terms, probably 1-month.
- Linkage: For you to be eligible for a loan, your lender could require that each loanee maintain a business account with them, a savings account, insurance, or any other connected items.
- Grace period: This is a period when you can stay without paying back the loan without attracting any penalties. It’s mostly granted in the initial stages of the loan repayment process.
- Guarantee: To build trust on whether to give funds or not, most lenders will require some form of security for the loans they offer specifically if huge loans are taken.
- Concession: Knowing in advance how quickly the money will be issued may help you decide on whether to accept the loan or not because you might need the money right away. Delivering the funds can take days, hours, or even weeks, depending on the lender.
Where to get business loans
With the introduction of internet loans, mobile banking, and lending apps, Israel’s strong banking sector has experienced enormous expansion. The nation is home to many reputable lending institutions, whose holdings account for a sizable portion of the GDP. Consequently, business loans are well-facilitated by the banking industry.
- Banks: By offering a variety of goods that meet their distinct standards, such as providing competitive interest rates, they have controlled the financial markets. Your company will need to be highly solvent to be approved for a business loan because most banks prefer to finance consolidated businesses.
- Companies and private capital lenders: As the loan procedure is done online, getting money from companies in this category has become simpler and easier. Due to their quick concessions, these lenders are preferred by Israelis looking for loans. They frequently charge less than banks for their financial solutions and products as well.
- Alternative financing platforms for crowdlending: these are online platforms where companies connect us with private investors. Once we request a business loan, it’s upon these investors to decide whether to contribute capital to your business or not. The whole process is done through the internet and it might take two days to receive feedback.
Business loan conditions
Though they vary among lending organizations, below are some of the common requirements you’ll need to meet:
- National registration: Entities will need to have assurance in their business registration and compliance with all legal standards (as defined by Israeli law) for operating a business in Israel, whether you are an ex-pat or a native.
- Annual income: Businesses must maintain account records, annual financial statements, and annual reports under Israeli credit bureau requirements. Before granting your loan request, your lender may require this information to determine the viability of your company.
- The seniority of the company: If you have been operating the firm for less than a year, it’s possible that your loan application won’t be accepted. Nevertheless, if your company is only a few months old or just getting off the ground, you might find alternative financing sources.
- Credit history: many lenders will check with the Credit Regulative Authority to see if you have a poor credit history. Poor credit history will automatically disqualify you from a loan.
Depending on the organization you’re trying to borrow money from, you could have to meet fewer or stricter requirements. Always ensure you meet the requirements to increase your approval chances.
Documents needed to get funding
- 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.
The lender will have you send the documents online via mail, courier, or deliver them in person. Depending on the entity, you might require fewer or more documents.
Other forms of financing for companies
- Business credit lines
With company lines of credit, the borrower can withdraw cash as needed until their credit limit is reached. The borrower will not pay back the entire amount of the loan; rather, they will only pay back the amount they have withdrawn plus any applicable interest. This product is made available by numerous Israeli lenders.
This is a type of financing for SMEs where the lender pays for our invoices to one or more suppliers. We’re then left to clear the bill with the supplier either in full (the interest included), in part, or installments.
- P2B or crowdlending loans
A private lender may choose to invest in our company through a digital platform or not. You will obtain varied services as you switch from one crowdlending platform to another in terms of the loan amount and terms and conditions due to the introduction of many crowdlending platforms.
- Loans with mortgage guarantee
With these types of loans, we’re only funded if we can present property (mortgage) to be used as a guarantee. The concession of these loans takes longer because of the appraisal processes involved.
Products to invest in your company
- Equity crowdfunding
On this platform, a borrower and an investor are connected. Until our company is stable, the private investor makes investments in it. It’s crucial to remember that after investing in your company, the investor will receive a portion of the company’s ownership and profits.
- Business Angels
Business angels are similar to equity crowdfunding only in that a group of investors come together and select a business in which they want to invest. Just like in crowdfunding, the investors will get a share of your company.
- 3F (Family, Friends, Fools)
The conditions of getting financing, and the applied terms and conditions from each of these parties depend on the agreement between you and the lender.
Aid for the financing of companies
- Capitalization of unemployment
This choice will be most advantageous to you if you’re self-employed and wish to launch a business. Funds are offered to facilitate business growth.
Federal subsidies and government grants in Israel are majorly offered during economic instability majorly caused by pandemics such as Covid-19.
Through these online platforms, you may get a private investor who’s interested in sponsoring your business or project. They will also provide all the required financing to see the business grow into an adverse competition.
About this page, our methodology
What this page is for: We are focused on providing you with the necessary information regarding consumer credits, the latest news concerning these credits, and the most simple steps to follow in acquiring personal loans. This helps you in selecting the best alternative that best meets your financial needs with minimum constraints.
Source: information about regulation on consumer credits has been drawn from The Ministry of Finance portals The Bank of Israel(CBI) data, and Credit Bureaus on Consumer Credits among other referential 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 FUNDGECKO: we are an online comparator website that’s designed to help our users have an easy loan application process by comparing the best options in the market and equipping them with the information they need beforehand.
Note: the services we offer are totally free for the user, as FUNDGECKO obtains its income from advertising and its featured products.