A significant percentage of business owners in Israel need or have needed financial help in the form of a loan or a line of credit to open businesses, make investments, or for cash flow needs. In many cases, the terms of the loan have a decisive effect on the viability of getting one and the success of the business, so it is important to make sure to check several options before applying for a loan, line of credit, or another type of funding.
There are many business funding options. We will focus on two accepted methods:
* Assistance in obtaining a loan that’s guaranteed by the state
* Assistance in obtaining a bank line of credit for businesses
Government guaranteed loans
Government guaranteed loans are loans intended to help small and medium-sized businesses that do not meet the threshold conditions to obtain bank financing. Business owners can receive financing guaranteed by the state for up to 70% of the amount and with a minimum guarantee of 25% on behalf of the business owner. The interest rates on government loans are lower than the usual interest rates on unsecured loans.
Help in getting loans / loan approval process
To get a government-guaranteed loan, business owners must demonstrate their capacity to repay the loan. Among other things, they must meet the funding threshold conditions and provide the bank with a series of documents including a detailed business plan, financial statements and a forecast of income and expenses. This step is very important in the application process as many applications are rejected after completing the initial eligibility questionnaire. Therefore, it is important to rely on the help of an experienced specialist at the early stage of the process.
Help in obtaining loans from a bank and opening a line of credit
Line of credit
A line of credit is a fixed amount a bank provides customers each month, even if their checking account is in over draft. A line of credit essentially determines the maximum overdraft the customer can reach as per the bank’s agreement.
What happens when you exceed your line of credit? Since a line of credit is actually a loan given by your bank, you will pay interest for this loan. It is important to remember that if you exceed the limit checks and fees may return, so it’s recommended you do not exceed the credit limit.
In day-to-day business activity, many businesses need cash to bridge the time gap between receiving money from their customers and making payments to various suppliers and creditors. To this end, banks provide their customers with credit lines under certain conditions.
Unlike a regular loan, on a line of credit, the borrower pays interest for the amount they actually used. In some cases, it may be possible to deviate from the credit limit and withdraw amounts greater than agreed upon. In the event of a deviation from the credit limit, you will pay the bank a larger interest compared to what you would have paid if you hadn’t exceeded the credit limit.
Applying for a bank loan
Sometimes, companies need credit to finance an investment, such as buying machinery and equipment to set up a new production line, buying a building, or relocating a factory to a new address.
In this case, you can contact the banks for specific financing for your purpose.
You can apply for a loan that will have a long period of several years and imply various forms of repayment so that the monthly repayments do not affect the cash flow of your business.
It is important to adapt the repayment method to the nature of the company’s activity and to its repayment capacity.
To apply for a bank loan, you will have to submit a large number of reports, including an income and expense forecast and detailed financial statements.
Mortgage advice / Existing mortgage cycle
Getting a mortgage is no easy task. Large amounts of money are at stake, which will affect the borrower’s financial situation for decades to come. In these conditions, it is recommended to make an effort to choose the most appropriate mortgage which suits your needs and capabilities.
The advantages of getting advice before getting a mortgage include:
• You get a loan with terms adapted to your needs
• You achieve a stable and correct financial balance
• You rely on someone else’s ability to professionally negotiate with the lender
Customers interested in using our services will benefit from full support throughout the process, which includes assistance in obtaining state-guaranteed loans, loans from banks, and assistance in negotiations with banks for lines of credit and loans.
For a consultation, call: 03-9360211
