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All the streets are already empty: a dismal tour of major arteries in the country
According to the consulting company BDI, the number of businesses that will be closed this year is expected to be about 74,000 - a 72% increase. What do the main streets in the cities look like in the middle of the closure?
Some businesses are open despite the guidelines and still - the picture is quite bleak.
Globes reporters went out to survey
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Globes reporters
Thursday, 31 December 2020, 05:55
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In the video: The Constitution Committee approved the closure regulations set by the government (Photo: Knesset Channel)
For almost a year now, small businesses in Israel have been getting up every morning and thinking about how to reinvent themselves, while on the move, moving through the maze of corona restrictions with one hand tied behind their back, and sometimes even two hands.
For moments, they almost breathed a sigh of relief.
For example, when the vaccines landed at Ben Gurion Airport. But then came the third closure, which caused some to re-store hope.
According to the business information company coface BDI, currently 12% of small businesses in Israel are in immediate danger of closure, compared to 3% of large businesses. Coface CEO of coface BDI, the reason is that "from the beginning, small businesses do not have the financial backing that large businesses have. It is more difficult for them to deal with low cash flow, and raise financing. Its cost is also more expensive for them."
There are about 550,000 small businesses in Israel.
According to BDI, by the end of 2020, about 74,000 businesses will be closed, compared to 43,200 in 2019 - an increase of 72%.
If in 2019 47,800 businesses were opened, then in 2020 only 37,900 were opened, a drop of 20%.
This is what the main streets in the cities look like in the middle of the closure.
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Many have already seen the light - and then received a third closure (Photo: Erez Michaeli)
Digital explorations
The accounting firm BDO estimates that the third closure is very significant for businesses, which have almost seen the light at the end of the tunnel.
90,000 small and medium-sized businesses in Israel are in immediate danger of closing, of which 25,000 businesses are in serious danger due to the third closure.
The BDO expects a loss of about 250,000 jobs, and an increase in the number of unemployed that will reach about 850,000 in the third closure.
The biggest hit, as expected, is in the areas of hospitality and food, art, entertainment and leisure.
According to Chen Herzog, BDO's chief economist, small and medium-sized businesses suffered more severe economic damage during the closure period, with "every additional wave of closures from small businesses to the edge of capacity and closure."
The Corona has forced many business owners to grope their way through ad hoc digital stores, but not all are able to adapt to the online age.
According to Herzog, "government policy does not suit the needs of small businesses."
The increase in credit crunch
The macro data indicate dramatic disparities in the extent of the Corona crisis.
According to CBS flash surveys, small businesses (5-10 employees) experienced an average 44% decrease in their sales turnover during the first closure, compared to an average decrease of 21.2% in the turnover of large businesses (over 250 employees) and 22.9% in a turnover of During the second closure, the average decrease in the turnover of small businesses was 23.7%, compared with 10.9% and 11.3% in large and medium-sized businesses, respectively.
Another indication of credit crunch among small businesses is obtained from a comparison in volume references state-guaranteed credit funds, treasury's accountant general manager. to date, the Fund has approved small business loans guaranteed by the state about 60 thousand small businesses, large businesses in the Horn of only 37 requests were approved credit.
the credit facility fund for small businesses, which was originally 4 billion, It has been increased several times and now stands at NIS 26 billion, while the credit line for large businesses, which was originally NIS 6 billion, has been reduced to NIS 5.2 billion. The rate of performance in the small business fund stands at 74% of the fund's greatly increased, compared to 38% Performance class at the Large Business Fund,
Shani Ashkenazi and Amiram Barkat
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