The Small Business Fund

The Small Business Fund - Information for the Applicant

This website contains a large amount of valuable information that concerns applying to the Small Medium Business Fund (the "Fund").

Tavor Economic Consultants Limited ("Tavor"), the company behind the success of the Fund, managed the Fund for 14 years in the course of which 30,000 businesses received from the Fund loans that amounted to some 8 billion new Israeli shekels.

Throughout the years Tavor has maintained high standards of examinations and service.

Tavor is at the disposal of any business with professional, credible and devoted quality service.

Set an appointment today and our advisors will visit your business, give initial consulting and examine your actual needs no strings attached.

With any question or inquiry contact Tavor’s experienced staff at the following numbers:

NameDirect lineExt. through BPX
Neta Flint09-7776814114
Shir Tavor09-7776815115
Adi Kaufman09-7776818118
Shir Aidan09-7776817117
Or Reuveny09-7776810110
Yaniv Nahum09-7776812112
Einav Shapira09-7776886186
Itai Bernstein09-7776832132
Shai Brachel09-7776840140

You can send us documents to Fax No. 03-7606727

The Objectives of the Fund

The State of Israel grants loans to small and medium businesses. The loans are granted in the following tracks:

The loans are granted by commercial banks to small or medium businesses, which are found commercially justifiable by the Fund’s coordinating body, and worthy of state backed loan by the credit committee.

General Track – a loan of up to ILS 8 Million

The Fund Terms

Maximum loan:ILS 500,000 for new business, or businesses with an annual turnover (Turnover) of up to ILS 6.25 million.
8% of the Turnover for businesses with a Turnover of ILS 6.25-100 million.
Loan Period:Up to 5 years with a six month grace period and 54 repayments.
Interest Rate:The interest rate habitual with the bank for loans of the same sort.
Assurances:60%-85% of the loan is guaranteed by the State.
The bank may require from borrowers collateral for the balance up to 25% of the loan (For more detailed information about the State guarantee and required assurances contact with our consultants).
In addition an owner guarantee is required.

Preliminary Requirements

The State has set a number of preliminary requirements to getting a loan:

  • Annual turnover of up to ILS 100 million.
    A business with annual turnover of up to ILS 25 million is considered a small business.
    A business with annual turnover of ILS 25-100 million is considered a medium business.
  • In the Investment Track - equity investment of no less than 20% of the total investment.
  • In the Set Up Track – equity investment of no less than 20% of the loan.
  • The business has no debt with regard to which there is no arrangement with the tax authorities.
  • None of the accounts of the business and/or of any of the shareholders is restricted and/or foreclosed, or about to be restricted and/or foreclosed.
  • There are no proceedings initiated by a bank against the business or its owners, including execution proceedings.
  • The business is not under receivership, dissolution, stay of proceedings and/or arrangement with creditors and is not facing execution proceedings.
  • The business does not have any impaired debt in its existing bank accounts.
  • The business does not have any outstanding loans from the Independent New-comer Fund, made available during or after the year 2012, or the Exporters’ Fund, even if made available by a different bank.
  • If the business is a non-profit organization – none of its members has any restricted account.

Getting a Loan

The process of getting a loan has the following main stages:

  1. The applicant approaches a bank or a consultant.
  2. The applicant’s needs are examined in order to determine the suitable loan track. Accordingly a questionnaire is filled and submitted to one of the Fund coordinating bodies.
  3. The applicant and Tavor meet with the coordinating body.
  4. The coordinating body submits a recommendation with the bank.
  5. Based on that recommendation and the recommendation of Tavor, the bank conducts its own examination.
  6. The application is considered at the Credit Committee and its decision is notified to Tavor.

Tavor’s Added Value

Consulting Tavor insures that the questionnaire is filled and the business plan is put together professionally and responsibly and the highest success chances.

Tavor is the most experienced entity in the system: Tavor established and developed the Fund for the State, and set its procedures and examination methods. The current activity of the Fund is based on methodologies and procedures developed by Tavor.

Tavor has examined over 30’000 businesses and maintains a sectorial database, that may assist in quickly and cost-effectively putting together business plans with unequaled efficiency and professionalism.

Former employees of Tavor hold most of the decision making positions, as examiners and as members of the Fund’s Credit Committee.

Click here for a list of consultants

Frequently Asked Questions (FAQ)

1. What are the conditions for application by a business which had already submitted an application?

Applying for an Additional Loan

  1. If the business has not borrowed the entire sum for which it is eligible, it can apply for a complimentary additional loan 6 months after the previous loan.
  2. A business which has borrowed the sum for which it is eligible in its entirety, can apply for an additional loan after 50% of the previous loan have been discharged.

For more details about that subject apply to Tavor consultants.

2. What is the determining sales turnover for the purpose of maximum eligibility?

The determining turnover is the one of the calendar year preceding the date of the application submission.
Medium businesses - annual turnover of ILS 25-100 million as evidenced by financial reports reviewed by an accountant or audited financial reports from May 1st.
Small businesses - annual turnover of up to ILS 25 million as evidenced by financial reports reviewed by an accountant or audited financial reports from August 1st.

Note: small and medium businesses applying for a loan of over ILS 1 million shall be required to present audited financial reports from May 1st.

The turnover of businesses applying earlier than the above mentioned dates shall be determined by trial balance and VAT reports.

3. What assurances are required in order to obtain a loan and what is the scope of the State guarantee?

The State provides the bank a guarantee for the loan. The duty to repay the loan rests first and foremost with the borrower. If the borrower is not able to repay the loan, the bank will attempt to reach an arrangement to spread the repayments. If the arrangement fails and the bank cannot collect the loan from the borrower, the bank will be reimbursed by the State. This is the meaning of the State guarantee, whose beneficiary is the bank.

 Maximal First LoanMaximal Second LoanMaximal Third and any Consecutive Loan

in Set-up

Required collateral:
10% of any loan sum up to ILS 300k.
25% of any part of the loan sum exceeding ILS 300k.
State guarantee:
80% of any loan sum up to ILS 300k.
70% of any part of the loan sum exceeding ILS 300k.

Small Businesses
(Except for
in Set-up)

Required collateral:
25% of the loan.
State guarantee:
70% of the loan.

Required collateral:
25% of the loan.
State guarantee:
70% of the loan.

Required collateral:
25% of the loan.
State guarantee:
60% of the loan.

Medium Business

Required collateral:
25% of the loan.
State guarantee:
70% of the loan.

Required collateral:
25% of the loan.
State guarantee:
60% of the loan.

Not applicable.

4. Who provides a guarantee for the loan?

Small businesses and businesses in set-up: the bank will accept a personal guarantee of any of the business owners, who holds no less than 5% of the equity, for the entire loan sum (an “Owner’s Guarantee”). If one of the business owners is a corporation, the corporation shall provide a guarantee or another security, per the discretion of the bank and the approval of the Credit Committee.
For additional details contact Tavor consultants.

5. What is the advantage of taking a loan from the Fund? Can I get better terms with an ordinary bank loan?

The aim of The Small Business Fund is to help businesses that are struggling to obtain a regular loan from the banks, either because they lack the necessary collateral or have reached the maximum credit approved by the banks. Loans under the Small Business Fund are made at an interest rate of up to Prime + 3.5% and collateral of up to 24.9% of the approved loan amount.

6. What can I get a loan for?

There are two approvable uses for the loans, each with its own slightly different application process:

  1. The Working Capital Loan is aimed at existing businesses that are experiencing growth and need help in funding cash flow gaps.
  2. The Investment Loan is aimed at new businesses or existing businesses pursuing new capital investment, such as, purchase of new machinery, setting up a line of production, opening a new branch, or remodeling, to name a few.

7. We intend to open a new business. Can we get a loan from the Fund?

Yes, the Small Business Fund approves loans to new businesses or those in formation. You should apply for an new businesses Loan and submit the relevant application.

8. My activity is registered as an exempt dealer / a non-profit organization / an agricultural cooperative association. Can I apply to the Fund for a loan?

The Fund’s charter allows giving loans to authorized dealers (as such are defined for VAT purposes), companies, partnerships, non-profit organizations and agricultural cooperative associations.

Exempt dealers may not obtain loans from the Fund. However, if the dealer’s status is going to change to authorized dealer before the completion of the examination process (45 days on average), the dealer can submit an application in the Set Up Track. If the loan is approved, it will be granted subject to providing an authorized dealer certificate.

9. Can only manufacturing businesses get a loan from the Fund?

No. The Small Business Fund is aimed at business enterprises in all sectors, be it industry, trade, services, agriculture, or tourism.

10. We are a start-up company or idea or a technological invention. Can we get a loan from the Fund?

While each application is reviewed on a case-by-case basis, companies in the product development stage that do not yet have revenues or customer orders, will not be approved for a Small Business Fund Loan. We can help you finding other sources of financing such as the Office of the Chief Scientist, venture capital funds, technology incubators, or angel investors.

11. I own a real-estate entrepreneurship company. Can I get a loan from the Fund?

Real-estate entrepreneurship companies can find better finance options in the form of bank project financing. The Fund does not replace this mechanism.

12. Two years ago I was a restricted debtor. Can I apply for a loan from the Fund? Recently a few checks I gave bounced and I was notified that my account is restricted or going to be restricted. Can I apply for a loan from the Fund? Last month 2 checks I gave bounced. Do I stand a chance of getting a loan from the Fund?

According to the fund's regulations, a business with a restricted bank account or one whose owner's bank account is restricted, is not qualified to receive a Small Business Loan. Once the account restriction is lifted, an application may be submitted, but it should be noted that a negative business history does not bode well for the chances to be approved for a loan. Returned checks due to insufficient funds are not viewed positively and may be a sign of poor cash flow management. A business that has bounced a check, but whose account is not restricted, may file an application. If this is an isolated incident, with justified explanations, and the business otherwise is performing positively, then a loan may be approved. However, it should be pointed out that in many cases returned checks are a symptom of more general business problems.

13. Can a business owner who is not an Israeli citizen apply for a loan from the Fund?

The Fund is for the benefit of all residents of the State of Israel, temporary residents and residents without Israeli citizenship included. Subject to all other conditions, a certificate of residency is sufficient to comply with the preliminary conditions.

14. Tavor’s offices are in Ra’anana. Why then is the fax prefix 03?

The fax number is correct. This is an off-site fax line that allows multiple faxes to be received at once without causing unnecessary delays.

15. How long is the process? How long does it take to get a ruling?

The average time it takes to process an application and for the Loan Committee to deliver its final decision is about 6 weeks, although there are cases in which it may take longer.

16. What is a Company Registrar excerpt? Will a Certificate of Incorporation be sufficient?

Business enterprises that are incorporated have "Ltd." adjoined to their name and are required to include, as part of their application, a current and complete Companies Registrar report. This report details the ownership structure and lists any liens on the company's assets. The report can be requested by calling the number 171.

17. How can I approach Tavor?

We can be reached by phone at (09) 777-6800, or directly by the extension to special consultants in the list above, or by email and you will be answered soon.

18. What bank should I approach?

The Small Business Fund works with 4 banks: Bank Hapoalim, Bank Mizrahi-Tefahot, Bank Otsar Ha-Hayal, and Bank Mercantile. You may postpone your decision abot the bank after consulting Tavor consultants. Every entrepreneur may find another band advantageous according to several parameters, as expertise of nearby branch, former accounts and history etc.

19. How much should it cost me?

20. What is the difference between Tavor and or other companies?

Tavor is the best. Tavor established the rules of the fund and its standards and it keeps the highest standards in the industry in treating applications and escorting companies, while keeping rational prices and fees. We do not make empty promises, but we can assure you that we are using to make efforts that many times make the impossible come true.

21. If I received funds from the Office of the Chief Scientist, the Ministry of Agriculture, or another government agency, can I still get a loan from the Small Business Fund?

In accordance with the Accountant General's regulations of August 2007, a business that has received assistance from another government agency is not qualified to receive a loan from the Small Business Fund. Any business that requests a Small Business Fund Loan is legally bound not to request assistance from any other government agency for the same plan of investment.

22. In the past I received a Small Business Fund Loan, can I get another loan?

Businesses that were approved for a loan after September 2003 may apply for an additional loan, up to a maximum of 500,000 NIS (together with the original loan). For more information about this particular circumstance, please contact us at Tavor directly so that we can instruct you on the documents needed in filing an application. Businesses that received a loan and have completed paying down the loan in full, may submit an application for a new loan of up to 500,000 NIS.

23. Who must sign a guarantee on the loan?

According to the Small Business Fund Regulations, any shareholder holding at least 5% of the shares of the corporation must sign a personal guarantee for the loan. If the holding is under 5%, and an immediate family member holds more than 5% of the shares, then the one holding less than 5% will also be required to sign a personal guarantee.

For further information, please contact us using one of the ways described above

Have a question? Contact us

Tavor Economic Consultants Ltd.

Founded at: 1991

Head Office: Corex Building
10 Zarchin St. Raanana, Israel

Tel: 09-7776800


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