Ruderman Business Development Loan Fund for People with Disabilities
“People with disabilities have the right and privilege, just like anyone else in our society, to achieve success through the establishment of a business which will benefit all of us. However, all too often people with disabilities are not provided the opportunity to succeed because of discrimination and lack of awareness. The result is that the largest minority population in our society, people with disabilities, are excluded from our workforce and are forced to endure a lonely existence. The Ruderman Loan Fund for People with Disabilities Business Development seeks to provide the opportunity for success by providing interest free loans to people with disabilities with innovative business plans. We hope that this initiative will encourage others to provide opportunities that will lead to a fully inclusive workforce.” -Jay Ruderman
The purpose of this fund is to assist existing businesses or to encourage the opening of new small businesses owned by entrepreneurs with disabilities. The goal is to facilitate the entrepreneur’s financial independence, to provide additional jobs and to make a positive contribution to the Israeli economy generally.
IFLA will process an application upon presentation of the relevant paperwork. The application must include a Certificate of Disability (physical or mental) to a degree of at least 40% disability.
The amount of the interest-free loan in unlinked New Israel Shekels is up to NIS 60,000 for cash flow and up to 90,000 NIS for opening a new business or capital investment. For loans up to NIS 30,000, only one guarantor will be required.
Applications will be accepted from a business that has the status of either ‘Osek Patur’ or ‘Osek Morshe’. The applicant must submit the application and the business plan through the offices of either the MATI or MAOF organizations.
Loan application procedure
1) Loan applications must be submitted only on an original IFLA form or the form downloaded from the IFLA website.
2) The applicant must complete the form in its entirety, legibly and with all details, and attach all of the required documents.
3) The Loan Confirmation Committee, made up of professional experts, will duly discuss the application. The decision is based on the data, documents required as backup, personal interview and professional opinion on the chance of success of the business.
4) An applicant who is an owner of/partner in another business must submit data on all of the businesses. If the applicant’s spouse manages a separate business, complete data must also be attached relating to the spouse’s business.
5) The Loan Committee is not obligated to explain its reasons for approval or rejection of a loan application or any decision regarding the amount. Appeals concerning any of its decisions will not be accepted.
6) After the loan is approved, the applicant must adhere to all the written and oral instructions provided to him concerning the signing of the promissory note and Bank Standing Order in accordance with the IFLA’s instructions.
7) IFLA reserves the right to request further information or clarification of the above.
8) IFLA will not process any application from businesses which do not meet its criteria.
General information on interest-free loans to small businesses
Requirements from a small business:
1) Independent entrepreneur, partnership or registered company. All the partners or shareholders must personally sign on all the paperwork. The entrepreneur’s spouse must sign on the promissory note and the rest of the loan documentation in addition to the entrepreneur.
2) A business whose monthly turnover does not exceed NIS 150,000.
3) A Value Added Tax file.
4) A bank account that is not restricted and has not been restricted in the past.
5) Applicants must be age 22-67.
2) File a referral and business plan from MATI (Small Business Development Center) or MAOF (from the Agency for Small and Medium Businesses at the Ministry of Economy).
3) It is most important that all the material that appears in the above list should be attached and that the financial reports are signed by an accountant or tax consultant.
Loans from other sources The receipt of a loan from another source does not preclude the receipt of a loan from the IFLA. One has to attach documentation confirming the receipt of a loan from another source (where applicable) and the terms thereof. Committees The Loan Committee does not convene on fixed dates. The quantity of applications is limited. The committee’s decisions are transmitted in writing the following day with a copy to the referring organization (MATI or MAOF). The committees do not explain the reasons for their decisions. The committees do not accept appeals on their decisions.
Repayment Period Repayments must be completed over a period of up to 45 months (depending on the amount of the loan), which commences one month after receipt of the loan and in accordance with the committee’s decision. It is possible at any time to bring forward the repayment without incurring any fine.
1) Loans up to NIS 30,000 – 1 guarantors
2) Loans up to NIS 30,001 and above – 3 guarantors.
1) The guarantors need to be between 22 and 67 years old.
2) The guarantors need to have been employed in their present place of employment for at least one year and earn at least NIS 3,000 net per month. A self-employed guarantor must present an authorization from an accountant/tax consultant confirming a net average income of at least NIS 3,000 per month during the last 12 months.
3) A current borrower or guarantor may not be a guarantor for another loan. A husband and wife cannot be guarantors for each other, nor for the same borrower, nor can they be guarantors for two loans simultaneously.
4) The guarantors cannot be partners or employees of the business receiving the loan.
5) A guarantor who lives at the same address as the borrower may not sign, nor can the guarantors live together at the same address.
6) Recipients of National Insurance Institute pension may not sign as guarantors.
Loan provision The borrower needs to visit the IFLA office in order to submit the standing order for repayments and to sign on the paperwork. The check from IFLA is dated from the first Friday following the date of completion of the entire process.
Loan Service Charge
|Amount of Loan||Independent Contractor||Partnerships & Corporations|
|up to 25,000 NIS||170 ₪||200 ₪|
|from 25,001 to 45,000 NIS||270 ₪||300 ₪|
|from 45,001 to 60,000 NIS||370 ₪||400 ₪|
|from 60,001 to 90,000 NIS||470 ₪||500 ₪|
The service charge is payable only when a loan is actually collected. It is a one-time payment.
List of documents which must be submitted with the loan application for small businesses:
Stage A Fill in the application forms precisely, and attach all of the following documents (Nos. 1-15).
1) Certificate of Disability
2) Photocopy of Identity Card of both spouses (including address attachments).
3) Curriculum Vitae.
4) Authorization of opening a Value Added Tax file.
5) Abstract from Companies Registrar listing shareholders’ names, company directors and existing liens (registered companies only).
6) Copy of partnership agreement, authorization of partnership owners and list of official signatories (partnerships only)
7) Rental agreement for the business premises
8) Audited Financial Report for the business signed by CPA/Tax Consultant for the past two calendar fiscal years and Depreciation Form for business and any additional business of the entrepreneur and/or spouse, including partnerships.
9) Detailed Trial Balance for the current year confirmed by CPA/Tax Consultant for the applicant business and any additional business owned by entrepreneur and spouse, including partnerships.
10) Obligo Report for the business bank accounts and private accounts, including current account balance, lines of credit, existing loans and collateral of all types.
11) Explanation on the business and a detailed explanation for the use of the requested loan.
12) Details of other sources of income of the family
13) Detailed monthly forecast of the expenses and income of the business for the next 6 months and future orders (where applicable)
14) A business plan and recommendation from the local branch of MATI or MAOF.
Stage B The application with all the required attachments will be submitted to the Loan Committee for its decision. In the event that the application is authorized the borrower must submit the following:
1) A bank standing order, with the borrower signature and the bank’s approval. The borrower must also receive from the bank signed copies of the standing order.
2) Guarantors must meet IFLA criteria.
The guarantors must be above the age of 22 and less than 67 and have worked in their current place of employment for at least 12 months.
Guarantors have to present a clear copy of their Teudat Zehut (including the address attachment), their last salary slip with the employer’s signature and stamp, form 106 (in the event that the salary slip does not show length of employment or commencement date for employment) and home and place of employment phone numbers. The net monthly income must be above NIS 3,000.
A self-employed guarantor must present an authorization from an accountant/tax consultant confirming a net average income of at least NIS 3,000 per month during the last 12 months.
Guarantors must not sign before receiving confirmation of their acceptability. The guarantors can sign at the IFLA offices or other locations specifically authorized by IFLA.
1) After completion of stages A and B the borrower come to the IFLA offices during reception hours. All the partners or shareholders must also come. The entrepreneur’s spouse can sign on the loan documentation either at the IFLA’s office or at a place authorized by IFLA and to attach a clear copy of the Teudat Zehut (including the address attachment) and last salary slip.
2) The borrower must bring all the paperwork, the standing order confirmed by the bank and the service charge. Proof of purchases can be brought (if already carried out).
3) The check from IFLA is issued for the first Friday following the date of completion of the entire process.
Please read the above criteria carefully to prevent misunderstandings and unnecessary delays. Click here for application form (in Hebrew)