2024-01-07 13:33:00
Bank of Israel’s Monetary Plan Supports Small Businesses Affected by War
Two months ago, the Bank of Israel announced a monetary plan to ease credit conditions for small businesses affected by the war. The plan provided a framework of 11 billion shekels of loans to banks for a period of two years at a reduced interest rate. The goal was to assist small businesses whose liquidity had been damaged by at least 25% as a result of the war.
Today, the Bank of Israel provided an update on the program, revealing that about 2,240 small and tiny businesses have received loans totaling approximately NIS 2.1 billion. This accounts for about 20% of the total scope of the program. The average turnover of the businesses receiving loans is about NIS 25 million, with the average rate of deterioration in turnover slightly higher than 50%. Additionally, a quarter of the loans were given under the state guarantee fund, and 45% of the loans were granted to businesses in the south and north of Israel.
The program has provided crucial support to businesses during a difficult time, allowing for continued operation and financial stability. It is likely that there will be increased demand for these loans following an interest rate cut, with the interest rate on the loans in the program now at 3%, down from 3.25% before the cut.
In addition to the monetary support, the Tax Authority recently announced a compensation outline for businesses affected by the war, providing further assistance to those who have experienced a decrease in turnover. The compensation outline is in effect until the end of December 2023.
Overall, these initiatives aim to provide essential financial assistance and support to small and tiny businesses affected by the recent war, helping them navigate through these challenging times.
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