Loans for starting a business: all you need to know

A loan to open a business or a loan to a new business is a necessity of most entrepreneurs who want to start a business. So who is eligible for a loan and who does not? All the answers in this article
In cooperation with Barak Rom

There are five options for getting a loan to start a new business .

Who gives loans to start a business?

State-guaranteed fund - grants loans guaranteed by the State to open a new business

The Poalim for Business Fund provides loans to open a new business

The Israeli Association - Loans for opening a business from the Small Business Loans Fund, without interest, up to 120,000 NIS

Jacob Sulam Fund - Loans for opening a business from a small business loan fund without interest up to NIS 100,000

Natan Fund - Loans for opening a business from the Small Business Loans Fund, without interest, up to 240,000 NIS

Who is eligible for a loan to open a business?

For a new business loan the entrepreneur should have experience in the field in which he is interested to engage. For example, an entrepreneur who worked in a convenience store could get a loan to open a convenience store but could not get a loan to start a fashion business.
The entrepreneur must demonstrate that he has had proper financial and banking conduct in the past. In other words, no checks or standing orders have been returned in the past three months, there are no cases open at the Execution Office and no legal claims are pending.
In order to receive a loan to open a new business, the entrepreneur must present the existence of customers who wish to work with him.
It is necessary to prepare a profitability forecast for the new business. The forecast should present a minimal profit that allows the entrepreneur to live and cover his monthly expenses on the one hand, and on the other pay the monthly loan repayments. A minimum net profit of NIS 15,000 is needed in calculating the forecast at the beginning of the business.
The funds require that the entrepreneur bring equity of ten to twenty percent of the total investment plan. For example, if the request for a loan to open a new business is 300 thousand NIS, is required to bring a sum of 40-60 thousand shekels from home.
Loan for a new business - what amount can be obtained

The amount of a loan to open a new business maximum to a new business in the funds is 500 thousand shekels. The funds usually do not allow for a total debt of more than NIS 300,000. For example, if an entrepreneur has a previous loan of NIS 100,000, he can receive a loan of only NIS 200,000 from the funds.

Yaakov AlonYaakov Alon
Loan terms for opening a new business

There are many differences between the funds that give loans to start a new business:

The Poalim for Business Fund enables repayment of a loan to open a new business within 6 years, while the State-guaranteed loan fund allows repayment within 5 years.
The maximum possible Grace period for a loan for a new business is a year in the Poalim for Business fund, compared to six months in a state-guaranteed loan fund.
The interest in the fund usually operates at one percent of the fund with state guarantees. Note that interest rates in the funds are decreasing due to competition between them.
The state-guaranteed fund requires a 10 percent deposit, compared to 25 percent in the Poalim for Business Fund
The Poalim for Business Fund undertakes to transfer the money to open the business within 12 business days, in contrast, a period of 3 to 4 weeks is required in the fund with state guarantees.
Submitting a loan application for opening a business is assisted by a business and financial consultant

You can apply for a loan to start a new business independently using the do it yourself method , but you should submit your application with the help of highly experienced experts who have done this hundreds of times. A company with professional business and financial experience that will check your data and accompany you to success. The company will learn your business and write A professional plan, you should contact the company who will advise you and guide you to a loan track to start a business that is best suited for you.