The state of small and tiny businesses during the war

The small businesses in Israel are responsible for over 60% of the workers in Israel, and are responsible for 55% of the GDP of the State of Israel, constituting a very valuable central engine for the country’s economy. After almost a year since the outbreak of the war, the Tel Aviv University Alumni Organization held a panel on the state of small and tiny businesses in Israel with senior members of the Israeli economy, alumni of the university:

Adv. Shulamit Geri - General Director of the Bank of Israel, an alumna of the Buchmann Faculty of Law at Tel Aviv University, told the panel: “At the outbreak of the war, the Bank of Israel took measures designed to facilitate and assist financially in this challenging period, while mapping the various needs arising from the field. One of the main tasks of the policy that leads the bank aims to encourage the flow of credit in the economy, with an emphasis on small and tiny businesses. Therefore, the Bank of Israel has implemented dedicated programs to facilitate and assist these businesses to succeed during this period, and to allow them to receive credit at improved interest rates, despite the risk inherent in providing credit to these businesses at this time. This step is intended to help small and tiny businesses survive this challenging period until they return to full business activity, and is added to a host of other measures taken, among them the implementation of the horizontal outline promoted by the supervision of banks to ease the burden of credit and fees for households and businesses. In addition, the bank held a unique online conference to inform small businesses about the financial and compensation options available for the businesses affected by the Swords of Iron War. We will meet with business owners who were affected by the war in the North. We at the Bank of Israel will continue to respond to the various economic issues arising from the war and will use the various tools at our disposal if necessary.
A strategic flagship project for the benefit of small businesses that we at the Bank of Israel are currently promoting is a database of credit data of small and medium-sized businesses to receive a better credit rating from the bank, similar to the conduct in the private market. The database will provide us with high-quality business information that will help credit providers scale and be able to provide more businesses with large credit for day-to-day operations”.

Adv. Amnon Merhav - Director General at the Ministry of Economy and Industry, an alumnus of the Gershon H. Gordon Faculty of Social Sciences at Tel Aviv University, “We are in a war that has been going on for almost a year, we are exposed to data of small businesses starting to close, and for us at the Ministry of Economy this is a worrying figure. We want to see more money going to small businesses and to reduce as much as possible the bureaucracy of the process of receiving grants. The state should be easier with businesses, and after the war it can take them into account, similar to what happened in the Coronavirus outbreak. 
A country in a time of crisis such as war should not engage in micro-management but rather provide as easy as possible, response and assistance to most businesses, a kind of assistance that will help them survive the difficult period so that the businesses don’t collapse. There are quite a few assistance programs for small and medium-sized businesses, it’s important that they know and be familiar with them, and soon we will also issue a call for small businesses to grant grants and assistance for participation in employee training”.

Tzameret Avivi - VP of Lahav Israel Chamber of Independent Organization, an alumna of the Gershon H. Gordon Faculty of Social Sciences and Jaime and Joan Constantiner School of Education at Tel Aviv University: “According to the Tax Authority, 70,000 small businesses are opened every month and 50,000 businesses are closed every year. 65,500 businesses were closed in just the first 6 months of 2024, a dramatic increase in the number of businesses that will close this year is expected, which suggests that the grants given by the state are insufficient and fail to keep the business owners above water. In times of crisis, the Israeli government doesn’t see enough of the small businesses.
As of 2024, after three years of coronavirus and the war crisis, the situation of the self-employed is deteriorating and the cost of living is not helping, the situation isn’t easy. Employees have a guaranteed livelihood and financial security, while the self-employed don’t. A small business must have financial security to calculate its steps. We in the Lahav organization come to all the committees in the Knesset with the decision makers together with the SBA and the Ministries of Economy and Finance, unfortunately, the red carpet hasn’t been rolled out in front of us and it’s difficult to proceed with this uncertainty.
Small businesses are an investment, not an expense, and are a major engine in the Israeli economy. The state should help restore and heal the businesses that were damaged in the war. Every Shekel that goes into a small business will be put into the state coffers with compound interest”.

Sigalit Ben Hayoun, Head of the Tel Aviv University Alumni Organization: “I’m glad to see that the university’s alumni organization includes many independent business owners as well as senior position holders in the Israeli economy. The panel enabled a successful connection between two significant audiences that take part in our community, allowing the transfer of knowledge and information, as well as possibilities for future collaborations. We’re confident in the success of the business community members of the alumni organization, in their rapid recovery in the Israeli economy. Our organization will continue to promote our community in a variety of activities, initiatives, and opportunities, you are welcome to follow and be a part of it”.

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