Finance Ministry expands scope of fund to small businesses to NIS 40b.
Finance Minister Israel Katz said that the easing of the lending approval process "will create a turning point, and will allow many businesses unable to secure loans up until now to get them.
By HAGAY HACOHENBUSINESS OWNERS in Tel Aviv protest the ongoing nationwide closure, on Monday.(photo credit: AVSHALOM SASSONI/FLASH90)
The Finance Ministry will increase the sums available to the state lending fund to aid small businesses hurt during the COVID-19 crisis to NIS 40.3 b., the ministry reported on Tuesday.Finance Minister Israel Katz said that the easing of the lending approval process "will create a turning point, and will allow many businesses unable to secure loans up until now to get them, with good conditions."Finance Ministry accountant general Yahli Rotenberg said that "we expect and hope to see a significant improvement in the economy and a return to growth in a few months."He added that the ministry is looking into two time periods: the near one, when more aid will be offered, and a time to exit the crisis.Business owners could secure a loan with the State of Israel shouldering 95% of the amount in case of default – meaning that the state would pay the bank 95% of the original sum should the business fold. Owners could apply if they lost 25% of income in one quarter of 2020 when compared to the same quarter in 2019.They can get a loan to cover 16% of their expenses during this time, or up to NIS 500,000, to keep their business open, whichever is less. Or, for those who have already secured loans, they can get 10% more, upping the loan covering their now-lost pre-pandemic earnings from a third to 40%. Requests are processed by the Ben David Shalvi Kop Accounting Firm. The fund has approved NIS 23 b. in loans for 61,000 business owners so far. The report arrives on the heels of a Monday presentation by National Economic Council chairman Avi Simhon, who told those attending the Eli Hurvitz Conference on Economy and Society that unlike other large-scale disasters, the COVID-19 crisis “has an expiration date.”“This is why we planned to offer unemployment benefits until June,” he said.
