Lawyer Urges Interest-Free State Loans to Prevent Small Business Collapse

Israeli small business owners are facing what the article describes as a daily struggle for survival, amid Bank of Israel data published in March on the final quarter of 2025 showing a deepening debt burden. The report said non-financial business debt, that is, debt of companies outside banking and finance, jumped to a record 1.51 trillion shekels, up 11% in one year, nearly twice the pace of private-sector growth.

The article says many businesses are relying on costly bank borrowing to cover production gaps, operations, and payments to suppliers. In practical terms, that often means taking bridge loans just to pay wages on time while waiting for customers to pay, and then owing interest on money that produced no profit. Instead of state support, many businesses have encountered closed doors and rigid bureaucracy.

Attorney Yosef Weitzman, whose firm handles many insolvency cases, said the figures do not surprise him because he sees these business owners every day. He noted that, about a year ago, the State Comptroller found that roughly 75% of small business aid requests were rejected. “The state must provide interest-free loans for small businesses to prevent mass collapse,” he said.

The article says cash-flow pressure is pushing many owners into non-bank credit, where loans are fast but carry especially high interest, a move experts say only deepens the hole and speeds collapse. It also says more companies and small businesses are entering insolvency proceedings, often too late, after bank accounts are restricted and checks are bounced. Weitzman said legal tools such as restructuring and stay-of-proceedings orders can sometimes be the last way to avoid full collapse of families, but he warned they are not enough on their own and called on the government to change policy and create urgent, dedicated support channels before 2026 brings a larger economic snowball.