Finance Minister Moshe Kahlon presented for approval by the Finance Committee of the Knesset normative act, which will allow small firms to attract investment for knowdledge (P2B loans, or Peer to Business Lending) without a prospectus, providing for the disclosure of significant pieces of information about the company, including information about risks.
“The law on the financing of companies through crutledge — the next step to non-Bank financing — said Moshe Kahlon. — It stimulates economic growth, reduces the cost of financing of companies and expands the investment options for the citizens”.
The head of the securities Department Professor Shmuel Hauser said that after the completion of the set of rules of crowdfunding, the Finance Ministry continues to expand non-Bank credit in Israel, the introduction of regulations for the system of knowdledge, or P2B. “This is another way to eliminate regulatory obstacles for market development, in addition to the exemptions for small businesses and startups, as well as in addition to tax benefits,” explained Hauser.
System knowdledge is the transfer of individuals funds to the small and medium business under a certain percentage. The company attracts loans from several lenders simultaneously. Some time ago was published the normative act regulating the system of crowdfunding, which allows a new company, which is too expensive to raise Finance through the stock exchange, to obtain relatively small amounts from individuals.
Money system knowdledge going through specific Internet sites, coordinating investors and the need of investments or projects. This is like crowdfunding, but works on a slightly different business model. So, investor reports how much he is interested to invest and what risk level is ready to go, and the coordinator spreads this amount among the several companies with the appropriate level of risk. Thus, in the case of bankruptcy or failure of development of the project investor of the P2B system loses only a small part of the funds. Company, raise funds, borrows money from at least 20 creditors (5% each): this also reduces risks for investors. Investors remain anonymous.
The rules will indicate the maximum amount the company is entitled to engage in a period of 12 months and maximum amount I can invest a single contributor.