December 20, 2012
Jewish Free Loan Association: Small-business help
Dan Savell and his wife, Abby, knew exactly what they needed to take their percussion rental business to the next level.
After opening their store in 2005, the Santa Clarita couple received countless client requests for a specialized gong set typically used by orchestras. The problem: a $14,000 price tag to purchase the instrument.
That’s when the Savells turned to a nonprofit Jewish loan agency for help. The Los Angeles-based Jewish Free Loan Association (JFLA) furnished them with a zero-interest loan to cover the purchase, putting the couple’s dreams for expansion within reach.
“Instead of having to … turn down work, it allowed me to have instant access to [the gongs] in my inventory,” Savell said. “It was this missing piece.”
In the current economy, finding the resources to start or expand a small business can be particularly challenging. That’s where several Jewish organizations can help, providing meaningful assistance to entrepreneurs, from financial aid to human resources management to self-employment career planning.
Established in 1904, JFLA helps entrepreneurs of any faith in the Los Angeles area start new businesses or expand existing ones with the help of three-year, zero-interest microloans. Typical loan amounts are about $15,000, although applicants can obtain as much as $20,000, association loan analyst Shelly Meyers said.
The money can be used to help cover myriad expenses associated with starting a new enterprise, such as advertising, equipment purchases, Web site creation and stocking up on inventory. Those helped by the program include physical therapists, lawyers, restaurant owners, yoga studios and day cares.
“It really varies,” Meyers said.
Loan applicants must submit a business plan and cash-flow projection and must have a business license. Borrowers need to have two co-signers, usually friends or family members with good credit and a steady income. The loan committee considers each applicant on a case-by-case basis, taking personal circumstances into account.
JFLA helps 50 to 60 new businesses a year through the loan program, Meyers estimated. She said demand for the loans has increased as banks tighten their lending policies in response to the country’s economic woes. Many startups simply cannot access traditional loans at all, she said.
“Whereas before they did have some opportunities from banks, I think it’s just become impossible for many of the small businesses,” she said. “Most of the people we see are not able to get a bank loan. It’s just a risk the banks aren’t taking these days.”
JFLA also offers emergency loans to individuals and families in crisis as well as student loans.
Jewish Vocational Service (JVS) offers a wide range of programs addressing the needs of families, job seekers, at-risk youth, refugees and people with disabilities. But when it comes to helping businesses, JVS provides human resources consulting, assistance with recruitment and training of employees, and career counseling that is open to budding entrepreneurs.
The business services section, established a year ago, offers solutions to companies on four levels: talent acquisition, employee assessment, staff development and outplacement assistance to employees affected by job loss. Fees may be charged for these services, although this is on a case-by-case basis. The section also helps companies procure state funding for training at no cost to the employer.
JVS, founded during the Great Depression, can post jobs on its employment database, screen and set up interviews for potential employees and sometimes host job fairs when employers have numerous vacancies to fill, said Chris Bravata, JVS’ business services vice president. There is no charge for this service.
“One of the biggest challenges for small businesses is finding talent. When a business has a vacancy, usually that’s a drain on internal resources in finding time to recruit, screen and interview potential employees,” Bravata explained. “We save the employer time and energy.”
People thinking about starting a business can obtain free advice from a JVS career counselor. Traditional job seekers and those seeking a career change can access this service, too.
At The Jewish Federation of Greater Los Angeles, small-business owners can apply for a one-time grant of up to $6,000 to acquire licenses or equipment to help their venture succeed.
Although the funds are not targeted exclusively at small-business owners, several such people have qualified for the assistance in the past year, said Lori Klein, Federation’s senior vice president of Caring for Jews in Need.
Applicants must be Jewish, live in the Los Angeles area and demonstrate financial need. They also are required to meet with a social worker at one of Federation’s partner organizations, which include JVS and Jewish Big Brothers Big Sisters of Los Angeles. Those applying for the funds are often people moving into self-employment for the first time, Klein said.
“I think part of what we’ve seen is that people that are being laid off from their jobs are not necessarily able to find work in the industry that they were originally trained for or educated in,” she said. “They’re trying to be creative and find other ways to have an income.”
Another grant program run by Federation offers up to $2,500 toward vocational training. Applicants may be seeking skills to pursue a new job or to start their own business.
Federation also provides emergency cash grants to people in need of immediate assistance with expenses such as rent or utility bills.