The survival rate for small- and medium-sized businesses founded by new immigrants and returning Israelis is higher than the overall rate for such businesses in Israel, according to a survey released this week by the Immigrant Absorption Ministry.
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While the overall survival rate of small- and medium-sized businesses in Israel in the 2006-2010 period was 62%, the rate for new immigrants and returning citizens who took out loans from the ministry’s Business Entrepreneurship Department during this period was 73%. Israelis – native-born or otherwise – who return to Israel after spending at least two years abroad may qualify for “returning citizen” status, which entitles them to certain benefits.
More than half the immigrants and returning citizens taking loans were from North America (the United States and Canada) or the Former Soviet Union (at 26% and 25%, respectively), followed by France (13%), Britain (6%) and Australia (4%), with the remainder from other countries, including Mexico and Brazil. The most popular business sector was services, followed by commerce, cosmetics, fashion, health and food.
New immigrants and returning Israelis looking to launch a business can qualify for a loan from the Business Entrepreneurship Department of up to 250,000 shekels ($72,900) at prime plus 1.75%, paid back over six years. No guarantor is needed, and there is less red tape involved than for most other loans.
The ministry granted some 200 such loans last year, with 56% going to new immigrants and 44% to returning Israelis.
The department, which was reorganized a year ago to increase the number and size of loans, last week launched a national center for business information, aiding new immigrants and returning Israelis in setting up new businesses or in expanding existing businesses.
Over 3,000 immigrants and returning Israelis received help from the Business Entrepreneurship Department last year, in areas such as writing business plans, mentoring, financial advice, feasibility studies, tax advice, seminars in pricing, and marketing and training. The help is provided by experienced, licensed business advisers in the immigrant’s native language.