Israeli companies hit by the coronavirus (Covid-19) crisis are eligible for loans and grants not only from local Israeli programs but also from the U.S. businesses aid program as well:
Any company that has operations in the U.S. and employs workers there can apply under the $2 trillion CARES Business Assistance Program that was passed at the end of March. The company does not have to be registered as an American company but only has to have a U.S. subsidiary that pays salaries to U.S. employees.
The most relevant clause for Israeli companies, and especially startups, is the eligibility for loans, some of which may transform into grants under the 7a section of the Small Business Administration plan. Under this section, a company that employs fewer than 500 employees can receive a loan of up to two and a half times the cost of wages paid to its employees up to a ceiling of $10 million. The loans, given at 1% interest rate and based on government collateral, are repayable within two years, with a six month grace period before payments are due. To top things off, the loan may turn into a grant if the company proves that the money received was used to pay salaries and prevented cutting salaries or terminating employees.
Under the auspices of the plan, $350 billion were earmarked for loans and grants to small businesses. Bank of America reported that as soon as the plan went into effect last Monday 177,000 businesses had applied for $32.6 billion in aid. JPMorgan said on Tuesday that it had received 375,000 requests for a cumulative $40 billion. Both these figures already make up a fifth of the program’s budget.
“In this program, it’s all about being first to the prize,” said Attorney Oz Halabi, a partner and head of the U.S. taxation department at the New York office of law firm Pearl Cohen Zedek Latzer Baratz and a former senior official at the Israel Tax Authority. “It is very important to submit applications as soon as possible and to understand that the program is relevant to 99% of Israeli startups,” he added in a conversation with Calcalist on Sunday. “True, there are details that are still unclear, but it is important to go ahead and fill out the forms. Trump himself operates as if he was running a startup: first throwing out an idea and then thinking and formulating the details”. Halabi explains that the $350 billion set aside for the program is not based on any calculation, but rather is simply a figure that was agreed on. Meanwhile, the U.S. Federal Reserve has also announced its own $600 billion loan program, but these loans are for larger companies and will not become grants…
“These days cash is king and every Israeli company that employs workers in the U.S. should have no reason not to apply,” Yifat Oron, CEO of LeumiTech, the bank’s technology arm, told Calcalist. “This is essentially a grant with which to pay salaries and that is significant.”
There can be little doubt that this loophole was intentionally put in the bailout agreement so that Israeli companies could take advantage of it, despite the fact that there are similar bailout programs already in Israel for Israeli companies.
The fact that virtually all Israeli start-up companies will qualify for this loan/grant money is well beyond coincidence.
And because these Israeli companies have insider help applying early, many of them will get this free money while actual American small business will not.
And the idea that the U.S. taxpayers are essentially subsidizing Israeli companies with virtually no strings attached shows us the depth of the parasitical relationship between Israel and the U.S.
Need we ask if any such program exists in Israel where foreign companies with subsidiaries in Israel will be given millions in free bailout money?
Technology and money flow only one way in this relationship and its from America to Israel. And if we’re lucky, Israel will allow us to buy back the technology we financed and engineered, such as the ‘Iron Dome’ missile systems.
And if you’ve got a problem with giving all this free money to Israeli companies, then you’re probably an ‘antisemite’ who will face jail time for daring to criticize Israel — if certain lawmakers and the ADL get their way.