No money? No problem • How and from whom to raise credit

You've decided to start a business or want to expand your business. Well, of course, you need money for that. If you have all the required amount in cash, here's what's good.

If you don't have one, here are some ways to get what you need:

The cheapest way exists in two ways: through interest-free loans and the Israeli Association for Interest-Free Loans.

• Most credit unions will give you a small amount and some will give you a loan with a single repayment - and that is a disaster (not the loan, but the repayment). Don't be tempted to take out a loan with a repayment all at once. You are only postponing the problem and not solving it (for those with nerves of steel and discipline of steel, you can take out a loan from a credit union, and at the same time open a savings plan with a monthly deposit of the proportional part of the loan, as if you were repaying the credit union, and when the repayment date arrives, you will break the savings plan and repay the credit union).

But most mortgage lenders cannot provide large amounts, and their distribution is also relatively short and produces a high monthly payment, which can strain the business's cash flow.

• The second cheap solution: The Israeli Interest-Free Loans Association (located on Rivka Street in Jerusalem) ILFA.

This association was founded by several American philanthropists, and provides loans to the private market (up to 20,000 NIS) and the business market in two tracks: working capital credit up to 60,000 NIS, and investments up to 90,000 NIS.

Both loans are granted with no interest at all, and are spread over up to 40 equal payments.

The conditions set by the association:

Having a well-organized business plan and 12-month support from a business consultant approved by them, a clean financial history for at least one year from the date of application, 3-4 guarantors with an income of at least 3,000 NIS per month, and at least 12 months of experience at the workplace (pay stubs are required).

Beyond that, they commit to responding within 14 business days, and disbursing the money within a week after approval. Short and to the point.

In both options described above, you may also be able to raise 70-100% of the amount you need.

We will talk about the banking system, how to choose a bank branch, and how to speak 'bankingly' - with God's help, in the next column.

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And in keeping with tradition: a question that came in an email from a project that lives in one of the Haredi communities.

This involves the development of courses for treating stuttering. The entrepreneur (a former stutterer himself) developed a unique method that helped him overcome the severe stuttering he suffered from. He is interested in starting to market the method, and is looking for an investor to finance the marketing and production of a device required to operate the treatment.

After a brief examination, I proved to him that it was better for him... not to look for an investor.

One of the common mistakes entrepreneurs make is that they try to go "big," and that's not always true...

In this case, manufacturing 5-10 devices + starting local marketing at low costs (for example, from local stores) can get things moving and generate revenue, which at the end of the process will also increase the value of the company (because there is revenue and because there are proven successes) and then it will be more 'paying' to look for an investor who will inject capital based on a higher company value...

We wish him good luck!

As usual,