Battle rages over credit for small business loans
The treasury said yesterday that it would be officially announcing the formation of an aid fund for small businesses in the north in a day or two.
Finance Ministry director general Joseph Bachar is in charge of the nascent fund. The treasury is not forming the fund's loan criteria with the manufacturers' association or the Industry and Trade Ministry, but rather with the banks.
"This is not a joint venture with employers," a treasury spokesman said yesterday. "At most, they call to get updates."
The comments followed a press conference at which Shraga Brosh of the manufacturers' association said the organization is "deep in talks" with the treasury about a fund to help small businesses affected by the fighting. Brosh explained that the treasury had agreed to invest NIS 200 million in the fund and that banks would give five times that in financing, giving the fund a total of NIS 1.2 billion.
According to Brosh, the fund would offer two-year loans with a six-month grace period before repayment would begin.
The Industry and Trade Ministry also announced yesterday that loans would be granted in the coming days according to criteria drafted jointly by Finance Minister Abraham Hirchson and Trade Minister Eli Yishai. The state would guarantee 90 percent of the loan, contingent on a personal guarantee from the business owner. The four-year loans would be expedited by the banks and include an eight-month grace period before repayment begins at prime plus 1.75 percent.
The treasury yesterday morning announced the cancellation of an evening meeting with representatives of northern business owners. The meeting had been set up after Prime Minister's Office director general Raanan Dinur intervened in response to opposition by business owners to the compensation deal the state stitched together with representatives of big business and organized labor.
In response, Chambers of Commerce president Uriel Lynn said, "Cancelling the meeting is an insult to residents of the north. They don't deserve this."
The PMO said the meeting would be rescheduled.