The Israel Free Loan Association
The Israel Free Loan Association is an Israeli non-profit organization located in Jerusalem dedicated to providing interest-free loans to individuals, families, businesses and non-profit organizations in need. The association grants more than 350 loans every month.
The IFLA is registered and approved by the Israel Ministry of Justice and Ministry of Finance.
The association is managed by a small paid staff (many of whom are immigrants themselves), supported by many experienced and dedicated volunteers.
Because of our contribution to the welfare of the citizens of Israel, the IFLA was chosen as recipient of the Mayor of Jerusalem's Citation for Outstanding Non-Profit Voluntary Organization for 1995.
The IFLA has also received the prestigious "Presidential Citation for Volunteer Activity", the "Ministry of Immigrant Absorption Award for Aid to New Immigrants" and the "Sderot Conference Award for Contribution to Israeli Society".
Loans
Loans are currently provided to low and middle income persons who can show proof of a minimum monthly income of NIS 3,000 and not in excess of NIS 13,000 net monthly family income. Guarantors with a net monthly income of at least NIS 3,000 for at least 12 months are required. A mutually acceptable monthly repayment schedule is worked out in advance with each borrower.
Small Business Loan*
Launch or development of small business enterprises
This fund is designated for the assistance and encouragement of small businesses, to help the borrower develop a small business that has been active for at least 6 months, or to help open a new business. The goal is to facilitate the entrepreneur’s financial independence, or provide additional jobs and/or make a positive contribution to the Israeli economy.
Minimum age: Single - 24, Married - 22.
If the business has not been operating for at least 6 months in its present format the applicant must submit the application through a professional organization such as MATI –The Small Business Development Center, or YAHPAK-Unit for Economic Development; or by a consultant registered with the Israel Chamber of Financial Consultants.
IFLA will provide a loan as a supplement to complete the financing of a project or business beyond the investment and financial support obtained from other financing sources. The amount of the interest-free loan in unlinked New Israel Shekels is up to NIS 90,000 for the development of an existing business or opening of a new business.
This loan is available subject to the availability of funds to the IFLA for this designated purpose by the donors.
General information on interest-free loans to small businesses
Definition of a small business
1) Independent entrepreneur, partnership or registered company. All the partners or shareholders must personally sign on all the paperwork. The entrepreneur’s spouse must sign on the promissory note and rest of the loan documentation in addition to the entrepreneur.
2) A business whose monthly turnover does not exceed NIS 150,000.
3) A Value Added Tax file.
4) A bank account that is not restricted and has not been restricted in the past.
Purposes
1) Development of the business – purchase of equipment, purchase of a vehicle (if the vehicle is essential for that particular business), renovations, expansion of infrastructure, advertising and similar.
2) Not for repayment of debts, purchase of stock (there is an alternative loan fund for these purposes) nor for the purchase of real estate.
Age
The loans are intended for married entrepreneurs aged 22 to 65 and single entrepreneurs aged 24 to 65.
Length of loans
Repayments must be completed over a period of 30-45 (depending on the amount of the loan) months which commences one month after receipt of the loan in accordance with the committee’s decision. It is possible at any time to bring forward the repayment without incurring any fine
Securities
1) Loans up to NIS 60,000 – 3 guarantors.
2) Loans between NIS 60,001 – NIS 90,000 – 4 guarantors.
Guarantors
1) The guarantors need to be between 24 and 65 years old.
2) The guarantors need to have been employed in their present place of employment for at least one year and earn at least NIS 3,000 net per month. A self-employed guarantor must present an authorization from an accountant/tax consultant confirming a net average income of at least NIS 3,000 per month during the last 12 months.
3) A current borrower or guarantor may not be a guarantor for another loan. A husband and wife cannot be guarantors for each other, nor for the same borrower, nor can they be guarantors for two loans simultaneously.
4) The guarantors cannot be partners or employees of the business receiving the loan.
5) A guarantor may not sign for a borrower who lives together with him at the same address, nor can the guarantors live together at the same address.
6) Recipients of National Insurance Institute pension may not sign as guarantors.
Repayments
Repayments are repaid through a standing bank order in 30-45 payments (in accordance with the size of the loan). Repayments commence one month after receipt of the loan.
Service charge
•For a loan of up to NIS 45,000 – NIS 250
•For a loan of NIS 45,001 – NIS 60,000 – NIS 350
•For a loan of NIS 65,001 – NIS 90,000 – NIS 450
The service charge is payable only when a loan is actually collected. It is a one-time payment.
Another IFLA Loan for:
Small Businesses Affected by the Economy or for Working Capital
Procedures for obtaining an interest-free loan for small businesses affected by the economic situation or for working capital.
Eligibility:
Loans are designated for existing small businesses throughout Israel. For the purposes of this loan, a small business is defined as having an average monthly turnover not exceeding NIS 150,000.
Procedures and criteria:
1) Each applicant must verify Jewish identity by presenting an Israeli Identity Card.
2) Applicants must be age 22-65 if married and 24-65 if single.
3) Applicants must include all of the paperwork specified in the attached page (List of documents to submit with the loan application for small businesses affected by the economic situation in Israel).
4) Applicant who is an owner of and/or partner in another business must submit data on all of the businesses. An applicant whose spouse manages a separate business must include complete data on the spouse’s business.
5) An applicant whose bank account is restricted or was restricted in the past will have to wait one year from removal of the restriction. Anyone who has filed for bankruptcy, has a file at Hotzaot LePoel, has a warning registered against his name in the banking system, or has a lien registered on his bank account, is not eligible for a loan from the IFLA nor to sign as a guarantor for another applicant.
6) Loans are up to the amount of NIS 60,000.
7) Loan applications must be submitted on an original application form or a form downloaded from the IFLA website.
8) Loan applications must be accompanied by a non-refundable check or postal check for NIS 20 (for registered companies N.Is 50) for the checking of the status of the applicant’s active bank accounts.
9) The Loan Committee may confirm or reject any application and decide on the amount of the loan without having to provide reasons for the decision.
10) After authorization of the request, a letter containing the detailed instructions and conditions will be sent to the applicant. No decisions will be given by telephone. Applicants must adhere to all of the instructions referring to signing of guarantors as well as remaining terms.
11) A one-time service charge of up to NIS 350 (dependent on the amount authorized) is to be paid upon receipt of the loan, as set out in detail in the loan authorization letter.
12) A loan applicant or current borrower may not be a guarantor. Each guarantor may sign for one loan only. A husband and wife cannot be guarantors for each other, nor can they be guarantors for two loans simultaneously. A guarantor may not sign for a borrower who lives together with him at the same address, nor can two guarantors live at the same address. Recipients of National Insurance Institute pension may not sign as a guarantor.
13) Loans are repaid through standing bank orders in 30 – 40 monthly payments (in accordance with size of loan). Repayments commence one month after receipt of the loan.
14) The borrower will be charged for bank charges incurred for any payment returned by the bank.
Contact
The Israel Free Loan Association
29, Rivka St.
Jerusalem 93461
Tel: +972-2-530-0777
Fax: +972-2-566-9504
e-mail: ifla@freeloan.org.il
website: http://www.freeloan.org.il