The state-guaranteed fund enables raising a loan at state guaranteed fund terms for the business
What is State-guaranteed funds?
The state cooperates with the business in guaranteeing guarantees for the bank loan.
The state allows state guarantees of 75%-90% from the loan sum to the bank, and as such the business itself remains the completion of the guarantees through cash that will be closed in a savings account or any other property that the bank accepts to receive as guarantee.
The role of the state-guaranteed fund is to recommend a positive recommendation of the business.
The fund is representing the state acceptance to provide the specific business which addressed the bank for a loan, with a guarantee through a state-guaranteed funds process.
The state-guaranteed fund is a commitment from the state to withstand the debt of the business in case the loan will not be returned.
The business owner still signs a personal guarantee on the loan, and as any other regular loan from the bank, the bank will implement the regular processes in order to guarantee the return of the loan from the customer.
Nevertheless, it is important to mention that the state-guaranteed fund will be effective just in case any other bank options to return the loan in front of the business have been done and failed.
The position of the state-guaranteed fund is to reduce the bank’s risk in providing the loan.
The businesses will continue to raise credit from a commitment on the loan return.
Is any one seeking to get state-guaranteed funds is eligible of getting one?
The answer is – NO!
The state is interested to help as many small businesses as it can to raise affordable and cheap credit. Make no confusion – the state does not accept to assist businesses with debt in front of tax authorities or businesses which are under the process that demand credit for closing debt such as bankruptcy.
Moreover, existing businesses that have already other banks debts will not be eligible to receive state-guaranteed fund loans.
That is why the fund has set a minimum criterion which defines whether a business is eligible or not to proceed the process of loan raise through state guarantees.
Self-eligibility check can be done independently at the fund’s web site, with no need of a financial advisor, however like every issue, it is also explained over the web.
This way you will avoid an embarrassing situation of loan raising that can be prevented due to a false consultation of a financial advisor that did not check properly the minimum requirement in front of the fund.
The state-guaranteed fund loans options
The fund operates in three different variable options, each designated for the business requested loan.
Business under construction option:
Suitable for entrepreneurs that request finance for opening a business
Suitable for businesses that needs to raise funds for an actual investment in the business.
Return capital option:
Suitable for existing businesses and raising of state – guaranteed funds for the ongoing operation of the business.
The right option for the business is the one which will define the target for which it is raising the funds for, and only then selecting the best option.
Each option has its own requirements for the checking process of the guaranteed funds; therefore, you must pay attention to it, and prevent a bigger issue that can be raised in getting the approval for the loan.
When you are being asked for which option you would like to apply for getting the state guaranteed loan? The answer will be the need of the business for cash.
Suitable for those who failed in getting business credit from the banking sector.
The referral to finance funds is a wide and effective solution that each business owner has to be aware of.
In Israel there are many funds, part of them governmental, some philanthropic in which their essence is the development of small businesses, and emphasis on employment in Israel especially in the suburbs.
These finance funds offer aid and financing at attractive conditions and are preferrable over banks and the regular banking sector. These are usually entities that act as not for profit entities , thus they can offer loans at attractive and comfortable return conditions, or granting fund guaranteed for preferred specific bank loans.
Would like to know if you are eligible and withstanding the criterions? Fill up the form below and one of our representatives will contact you shortly.