Hebrew Free Loan Association of Austin Celebrates Five Years of Lending a Helping Hand
By Tonyia Cone
This fall, Hebrew Free Loan Association of Austin is celebrating five years of serving as a financial safety net for the local Jewish community. Since it was founded in 2011, HFLA has provided 55 short-term, interest-free loans totaling $150,000.
Carole Wood received one of those loans. The first day her son was home from the University of Houston for winter break in 2013, Wood let him borrow her car.
Around midnight he was heading home when he and a friend in the passenger seat were struck by a drunk driver who ran a red light. The collision severely injured both young men and tore the front off her four-month-old car.
Wood, a retired preschool teacher, explained that although she was working full time, she did not have collision insurance because she could not afford full coverage. Wood had filed a lawsuit, but it would be several years before she would receive the money.
She looked into public transportation, but the city buses did not run early enough or in a pattern that would get Wood to work on time. And once she got to work, she did not know how she would be able to get to the grocery store and other errands.
“I was kind of frantic because I pretty much lived paycheck to paycheck. I just didn’t have the kind of money to buy a new car,” Wood said.
Wood’s parents helped her out, not only with a check that got her halfway to purchasing a used car, but with the suggestion to turn to HFLA, which loaned her $2,500.
“It got me to where I needed to be,” Wood said. “I don’t know what I would have done without them.”
Tracy Solomon, HFLA president, explained that the organization strives to assist people before they are in a crisis and need Shalom Austin’s Jewish Family Service (JFS).
“You don't have to be in a desperate situation to come to us,” Solomon said. “I've referred to us before as kind of the friendly bank in town because a lot of these people probably don't have good credit or they've had hard times and wouldn't be able to get a loan.”
HFLA loans can be used for almost anything. Past loans have been used for credit card consolidation, summer camp, books and housing for college students, fertility treatments, legal services, dental services and housing deposits. One borrower used the loan to purchase a car in order to work for Uber.
HFLA’s process includes an application and requires at least one guarantor, a person who guarantees to pay back the debt if a borrower defaults on an obligation. All clients are kept confidential.
In order to be eligible for an HFLA loan, an applicant must be a member of the Austin Jewish community; have a request deemed meaningful or necessary by the loan committee; be at least 18 years of age; reside in the greater Austin area -- Travis, Williamson or Hays County -- with at least three months residency; be a United States citizen or legal resident; demonstrate the ability to repay the loan on time; have paid in full any prior loan from HFLA; and cannot currently be a cosigner or guarantor on another loan.
Once a loan is approved, the borrower receives a check and has three months before starting to pay it back. Payback is done over 24 months. HFLA’s repayment return is 96 percent, and repaid loans go back to HFLA’s bank and are re-distributed as loans to other applicants.
Wood explained that working with HFLA was a very dignified process.
“They do it in way that doesn’t tear you apart as a human being. They are aware of your self-respect and your ability to pay them back at whatever pace you can afford. It means the world when you feel everything is falling in around you,” she said.
Since HFLA granted its first loan in January 2012, the number of requests has increased each year. The organization granted eight loans in 2012. By August 2016, the organization loaned money to 14 Austinites, and three more were in progress.
Solomon chalks up the increase in applications to getting HFLA off the ground quickly, with support from the International Association of Jewish Free Loans, and increased awareness of the program. She and the rest of HFLA’s board, which is made up entirely of volunteers, have promoted HFLA through word of mouth, local clergy members, Jewish Family Service, Facebook, and sponsorships with the Jewish Federation Young JFS, Hillel and Chabad.
The board has also streamlined the application process by placing it online and simplifying the guarantor information, created an advocates program where key community members help to spread the word about HFLA, and raised the loan limit to $5,000.
“I think it's become an incredible resource,” Solomon said, adding that some of the highlights over the past five years have been delivering checks, when people pay off their loans.
“You get thanked that it made such a difference in their life, and it's so rewarding when you hear those stories,” she said.
Some people, including Tovah Pentelovitch, have taken out multiple HFLA loans over time.
Pentelovitch learned of California’s version of Hebrew Free Loan when she was in law school. Over the summer she had an internship, but there was a gap month where she did not receive federal student loans and needed extra income to pay her bills.
She found HFLA, applied and received a loan, and has since paid it off. When she was later studying for the bar exam, she took out a second HFLA loan to cover living expenses. She has now almost paid this loan off as well.
“If I hadn't received HFLA loans I likely would have either borrowed money from a family member to cover my living expenses, or may have taken out a private loan while studying for the bar exam. But, thanks to HFLA, I was able to get the modest amount of money I needed to pay my bills without being subjected to the arguably predatory interest rates tacked on to private student loans,” Pentelovitch said.
Solomon believes that stories like Pentelovitch’s demonstrate HFLA’s success.
“People know that we’re available,” she said.
Over the past year, HFLA’s board has shifted its focus from getting money out in the community to fundraising.
While HFLA board members previously raised funds quietly through personal asks, the organization is celebrating its five year birthday with a 5 for 50 campaign, an attempt to raise $50,000 during the High Holidays. So far HFLA has raised $16,000 toward the goal.
“We're the one organization where we don't want the money sitting in the bank,” said Solomon, adding that HFLA reached a turning point this summer and can no longer keep up with demand for its loans.
HFLA goals for the next five years include continuing to grow the program and adding partnerships with JFS and other organizations in town. Solomon would like to see HFLA become as well known in the community as JFS, and wants community members to “like” and share HFLA on Facebook.
“It's been a great learning experience, just putting this together and really seeing the changes that you can make in a community,” Solomon said.
For more information about HFLA, visit hfla.org or contact email@example.com. For loan applications and questions, contact firstname.lastname@example.org.