Jewish groups grant interest-free loans for bad economy – the forward
Dasha Fishman works for a non-profit organization that provides services to children and adults with developmental disabilities. The work doesn’t pay much, around $ 33,000 – it’s not enough to cover the cost of her rent, utilities, or student loans, so she supplements her income by working directly with people in need. specials at home after work. Now, because of the social distancing measures, she can’t do that. Her husband works in sales and is paid on commission, but her clients either withdraw or do not respond due to economic instability.
“Of course I’m worried,” she said. “There are a lot of unknowns. I’m just trying to take it week by week at this point. I don’t really know what to do if the money runs out.
But thanks to a Jewish organization, she has a little less reason to worry. That’s because the Hebrew Free Loan Society of New York, which gave her an interest-free loan last year to help lower her student loan costs, announced that it was suspending repayments for both. next months.
Jewish nonprofits across the country have stepped up to help those affected by the coronavirus – but perhaps none as tangibly as the country’s free loan companies, as they put or keep money. straight into people’s pockets. In many cases, the beneficiaries are people who never thought they would have to rely on community support.
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The HFLS hopes to raise around $ 6 million to fund its new emergency loan program to help people who have been made redundant or have new health or child care expenses. They have already received $ 500,000 in grants from the Charles and Lynn Schusterman Family Foundation and financial planning firm BlackRock, as well as a $ 1 million loan from the UJA-Federation of New York. The UAJ also selected HFLS to administer its $ 20 million loan fund to local Jewish nonprofits, which had long struggled with government repayment payments months behind, but are slowly losing momentum. ability to finance their programs from their cash reserves.
Such companies are found in 23 states, according to the International Association for Free Jewish Loans. Known in Hebrew as gemachim, they offer small loans to businesses and individuals – and unlike bank loans, they’re interest-free. Other gemachim, from Philadelphia cream To Los Angeles, have launched coronavirus response programs similar to New York’s, sometimes raising ceilings on loan amounts and lowering the necessary number of guarantors. (Numerous acted the same way when the government shut down last year).
For Fishman, taking a break from his monthly loan bill means “continuing to pay for food, car insurance, drugs.”
But organizations like HFLS rely on repayments from recipients in order to continue giving more loans while they have stopped collecting, so they could be stretched if they don’t get their own financial backing.
“We need capital to make new loans, partly because we are not receiving repayment on current loans, but also because we are seeing demand for new loans,” said the executive director of the HFLS, the Rabbi David Rosenn.
Rosenn said that although his organization and other gemachim have already gone through financial crises, including the Great Recession of 2008, the rapid onset of the economic shutdown has made it unprecedented.
“We didn’t have plans in place for something like this,” he said. “I don’t think anyone had plans in place for something like this. We planned as we went.
They try to promote their programs by reaching out to laid-off restaurant and concert workers, as well as workers in New York theaters. Rosenn stressed that candidates don’t have to be Jewish.
This was the case for Andrei Danetiu, who immigrated from Romania to Ridgewood, Queens at the age of 13. Almost exactly a year ago, he opened a children’s cafe / play area called Lidia’s Play Café, named after his daughter. The company, which had received an HFLS loan, had “gradually grown” thanks to income from the café and reservations for children’s birthdays. But as news of the coronavirus spread, business started to take a dip.
“Parents, when they get their kids to eat and play, they know the kids are going to touch things and put things in their mouths,” he said. “Due to social distancing, we have seen slow business. Then private hosts called and asked for refunds and cancellations. When we closed the doors on March 16, we had already experienced how slow business was. But at the same time, state health and government agencies were already recommending that we shut down. “
Danetiu said he was concerned about Lidia’s prospects even after social distancing measures were lifted. “As a business owner who depends on the income of the business to get things done, it is very difficult not to know when this will pass or when we can return to some kind of normalcy,” he said. declared. “And if we come back, will everyone be poor and unable to buy at the cafe?” “
Danetiu and his wife have earned all of their income from Lidia, but still have to pay numerous bills, loans and costs. But for now, they are off the hook to reimburse HFLS. He said he was incredibly grateful.
“I hope I can get through this so that in the future I can pay them back with donations and things like that,” he said.
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