Dasha Fishman works at a not-for-profit organization that provides services to children and adults with developmental disabilities. The job 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 special-needs individuals in their homes after work. Now, because of social distancing measures, she can’t do that. Her husband works in sales and is paid on commission, but his clients are backing out or are nonresponsive due to the unstable economy.
“Of course I’m worried,” she said. “There’s a lot of unknowns. I’m just trying to take it week by week at this point. I don’t really know what I’m going to do if the money runs out.”
But thanks to one Jewish organization, she has slightly less reason to worry. That’s because the Hebrew Free Loan Society of New York, which had provided her with an interest-free loan last year to help lower her student loan costs, has announced that they are suspending repayments for the next two months.
Jewish nonprofits around the country have stepped up to help those affected by the coronavirus – but perhaps none so tangibly as the country’s free loan societies, because they’re putting or keeping cash directly in people’s pockets. In many cases, recipients are people who never thought they’d have to rely on community support.
The HFLS hopes to raise around $6 million to finance their new emergency loan program to help people who have been laid off or have new healthcare or child care costs. They’ve already received $500,000 grants from the Charles and Lynn Schusterman Family Foundation and the financial planning firm BlackRock, plus a $1 million loan from UJA-Federation of New York. UJA also selected HFLS to administer its $20 million loan fund to local Jewish nonprofits, which had already long struggled with months-late government reimbursement payments but are slowly losing the ability to front the money for their programs from their cash reserves.
Such societies are found in 23 states, according to the International Association of Free Jewish Loans. Known in Hebrew as gemachim, they provide small loans to businesses and individuals – and unlike bank loans, they’re interest-free. Other gemachim, from Philadelphia to Los Angeles, have launched similar coronavirus response programs to the one in New York, sometimes raising the caps on loan amounts and lowering the necessary number of guarantors. (Many acted similarly during the government shutdown last year).
For Fishman, getting a pause on her monthly loan bill means “continuing to pay for food, car insurance, medications.”
But organizations like HFLS rely on the repayments from grantees in order to keep giving out more loans while they’ve stopped collection, so they could be stretched thin if they don’t get financial support of their own.
“We’re in need of the capital to make new loans, in part because we’re not receiving payments on current loans, but also because we’re seeing demand of new loans,” said HFLS executive director Rabbi David Rosenn.
Rosenn said that even though his organization and other gemachim have weathered financial crises before, including the Great Recession of 2008, the rapid onset of the economic shutdown made it unprecedented.
“We did not have plans in place for something like this,” he said. “I don’t think anyone had plans in place for something like this. We’ve been planning as we go.”
They’re trying to promote their programs through outreach to laid-off restaurant and gig workers, as well as New York theater employees. Rosenn stressed that applicants don’t have to be Jewish.
That was the case for Andrei Danetiu, who immigrated from Romania to Ridgewood, Queens at the age of 13. Almost exactly a year ago, he started a café/children’s play-space called Lidia’s Play Café, named after his daughter. The business, which had received an HFLS loan, had been “gradually growing” with revenue from the café and bookings for children’s birthday parties. But as news of the coronavirus spread, business started to nosedive.
“Parents, when they bring their kids to consume and play, they know kids are going to touch things and put things in their mouth,” he said. “Because of the social distancing, we saw slowness of business. Then private party hosts called and asked for refunds and cancellations. When we shut the doors on March 16, we had already experienced slowness of business. But at the same time, the state health and government agencies were already recommending that we shut down.”
Danetiu said that he’s concerned about Lidia’s prospects even once social distancing measures are lifted. “As a business owner who depends on revenue from business to keep things going, not knowing when this will pass or when we can come back to some kind of normalcy is very difficult,” he said. “And if we do come back, will everybody be poor and unable to purchase from the café?”
Danetiu and his wife derived all of their revenue from Lidia’s, but are still on the hook to pay many bills, loans and costs. But for now, they’re off the hook to repay HFLS. He said he’s incredibly grateful.
“I hope I can get through this so that in the future I can pay them back through donations and things like that,” he said.
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Jewish groups give interest-free loans in bad economy