A program that offers a helping hand to qualifying businesses and individuals can now provide interest-free loans in Orange County.
According to Rachel Grose, the Executive Director of Jewish Free Loan Association, an interest-free loan program that currently serves Los Angeles, Santa Barbara, and Ventura Counties has now expanded into Orange County.
“The real idea behind the organization is to help people, normally self-supporting adults, when a one-time emergency comes up that they cannot handle,” said Grose.
She said the loans are designed to prevent individuals from falling into predatory debt during one-time financial emergencies.
“There are a lot of people for whom a one-time expense derails their future, their financial future, because they have no choice but to turn to predatory loans or high-interest credit cards,” said Grose.
Individuals can qualify for interest-free loans of up to $15,000, she said, while businesses can qualify for loans of up to $50,000.
Emergency personal loans can cover medical, dental, housing security deposits, car repairs, pet care, and other such needs, capped at $15,000.
Small Business Loans, meanwhile, can support inventory, payroll, marketing, and equipment; capped at $50,000, she said.
Education loans support post-secondary and vocational schooling, but they are capped at $10,000 and renewable annually for full-time students.
Disaster loans fund relief from crises such as wildfires or earthquakes or help with immediate needs like clothing and electronics after disasters.
Most loans carry a 36-month repayment term to keep payments affordable for self-supporting adults facing temporary hardships.
The key caveat is the mandatory requirement for a guarantor. Grose said both business and personal loan recipients must have a guarantor upon whose credit the loans depend, though the credit is checked for both.
“To maintain a 99% repayment rate through social accountability and peer pressure, all loans require a guarantor regardless of the client’s credit score for smaller amounts,” said Grose.
For larger loans, the organization reviews the client’s credit score, and it also evaluates the guarantor’s credit score during the application process.
She said the organization is considering loosening its guidelines, but this process has worked well for the nonprofit.
Once approved, the organization operates as a virtual entity only, using DocuSign and online intake processes to manage all transactions without physical visits.
As a nonprofit, it relies entirely on donations to sustain operations rather than generating profit through interest or fees.
For those interested, more information is available at jfla.org.