Israeli Businesses Find Multiple Alternatives to Bank Loans for Quick Financing

Israeli businesses needing rapid financing no longer have to rely solely on their bank for loans. Accountant and lawyer Eran Buchris explains that companies seeking, for example, half a million shekels to cover inventory, supplier payments, or operational costs can now explore various credit options beyond their primary bank. While established businesses with good financial standing might receive quick loan offers from their current bank, Buchris advises comparing offers from competing banks, as they may provide better terms. He notes that about 90% of his clients maintain accounts with two or more banks, reducing dependence on a single institution.

Non-bank credit options are also available, often with higher interest rates but greater speed and flexibility. For instance, a non-bank loan at an annual cost of around 9% might require monthly repayments of approximately 10,400 shekels over five years for a 500,000 shekel loan, compared to about 9,900 shekels monthly at a bank rate of prime plus 2%. Buchris emphasizes that the higher cost can be justified if it enables a profitable business deal that would otherwise be delayed or lost due to slower bank approval processes.

Businesses owning assets can also secure loans against collateral, potentially lowering costs and extending repayment periods, though Buchris cautions against using long-term assets to cover short-term cash flow gaps. For companies with approved invoices worth 500,000 shekels payable in 60 to 90 days, invoice discounting or financing against future receivables might be more appropriate than long-term debt. Buchris concludes that understanding the exact financial need is crucial before choosing the type of credit, recommending a thorough comparison of costs, collateral requirements, and repayment terms to select the best fit rather than the easiest option.