As one of the oldest agencies serving the Bay Area Jewish community, the Hebrew Free Loan Association has weathered its share of economic hardships, in addition to those of its clients.
The current recession, coupled with the responsibility of meeting the financial needs of potential borrowers using funds vulnerable to depletion has forced the S.F.-based agency to make some tough choices.
“We have tightened our scrutiny,” Executive Director Ed Cushman said, referring to the loan selection process. “We have turned down a number of people in ways we wouldn’t have before, either based on the fact that we felt the need wasn’t great enough to help them, or we felt they had other alternatives.”
Yet prospective clients continue to stream in, seeking loans to pay for college, to find temporary relief from debt or to stay afloat during a period of unemployment.
And just last month, Hebrew Free Loan received some temporary relief of its own when the S.F.-based Jewish Comm-unity Federation and Jewish Community Endowment Fund directed $300,000 of its $7 million “rainy day” withdrawal toward the agency.
That gift is divided into two: $200,000 to replenish diminishing loan capital reserves, and $100,000 to create a new fund that helps applicants who normally would have trouble meeting all HFLA loan criteria.
“It’s absolutely wonderful,” Cushman said of the federation gift. “We deeply appreciate the support. The $200,000 helps us with out immediate problems, but if the basics don’t change, over time we will be back facing similar issues.”
During the previous fiscal year, Hebrew Free Loan approved roughly 25 percent (about $600,000) more new loans compared to this time last year. Approximately $3.1 million has been handed out since July 2008, according to Cushman.
Currently, there are more than 1,000 borrowers who owe the agency a collective $6.2 million. “We have more money out in loans than ever before in the history of the agency,” Cushman said.
He added that the last time Hebrew Free Loan experienced that many borrowers was in the early ’90s, when a wave of Russian Jewish immigrants arrived in the Bay Area.
Client-wise, “it’s unprecedented,” Cushman said. “We’re extremely busy. There are a lot of people who are in need of support and help — it’s really difficult.
“We’re sending a lot of money out to the community, but we have to be careful and cautious about how much funding we’re depleting at this point. It’s a delicate balance, as it is for all agencies.”
Hebrew Free Loan offers interest-free loans to eligible Jewish individuals. Those seeking loans must complete a process that includes meeting in person with a Hebrew Free Loan staff member and obtaining cosigners or a security agreement.
Once a loan application is approved, a repayment schedule is established. Repayment usually begins 30 days after receipt of the loan, and ranges from two to five years depending on the amount. Loans can be approved from $2,000 to $25,000, according to the agency’s Web site.
If a potential borrower’s loan request is denied (which Cushman said does not happen often), he is referred to the agency that can best meet his needs. For a new job, it’s Jewish Vocational Service; for financial counseling, it’s the S.F.-based Jewish Family and Children’s Services.
Other than that, “there is no comparable agency in the community that provides the kind of service we do,” Cushman said.
While Hebrew Free Loan has made more of an effort to publicize its services, Cushman said the influx of clients is primarily in response to “what’s happening in our world right now.”
He’s seen a family on the verge of losing their home; a person whose medical needs weren’t completely covered by insurance; and a newly married couple struggling to make ends meet after the loss of a job.
“These are stories of great angst,” Cushman acknowledged. “Sometimes Hebrew Free Loan is the only option, the only opportunity for them. We offer a really unique service that no one else does, and strive to help as many people as possible, provided our agency is protected.”
Cushman and his staff are in the midst of doubling their fundraising efforts by promoting Hebrew Free Loan’s membership campaign and aggressively reaching out to the community. The agency also is working to expand the Legacy Society, composed of those who bequeath money to Hebrew Free Loan.
If more money isn’t raised and the demand for loans continues, Cushman said the agency might have to turn down more loan applicants. However, he doesn’t anticipate that will happen.
“If you trace the history of the Bay Area, loan activity has risen and fallen based on what’s happening in the community,” Cushman said. “For 112 years, Hebrew Free Loan has responded to that. It makes me proud to be part of the organization.”