The Ness Loan Fund

Posted on May 5, 2015

Submitted by Howard Schneider,
May 4, 2015, Beersheba, Israel

A very busy yet interesting day.
 
I arose at 7 to meet my ride to Beersheba. Today is the meeting of the Ness Loan Fund.
 
The Ness Loan Fund was established to assist small businesses in the Negev. It is a joint program of the Greater Miami Jewish Federation and the NJ Federation. 
 
Currently the Fund provides loan guarantees for small businesses and start-ups of up to 300,000 NIS or approximately $75,000.
 
The loans are made through a participating bank at interest rtes of prime plus 1 1/2 % and repayment terms of up to six years.
 
Eshchar Rinot is the Jewish Agency staff person who coordinates the fund for the South. He obtains applications, investigates the businesses and the principals. If the applicant meets the criteria the loan package is presented to the loan committee. The applicant is invited to the loan committee meeting to clarify any items which may come up.
 
Ness Loan FundThe committee consists of a representative from the participating bank; representatives from the Miami and NJ Federations; a local representative; the Chair, a local business woman and representatives of the Jewish Agency. 
 
Today there was one more person asking questions, a volunteer CPA from Miami, me.
 
The agenda lists five presentations and a discussion of a pending loan.
 
I argued against one loan as I felt that the package omitted the cash flow from a sector of the operation which was to come on line during the term of the loan. 
 
It was pointed out that the fund has a philanthropic purpose and a specific goal of supporting agricultural programs in the Negev. The loan met this criteria and the repayment was assured by other means and it was approved.
 
I mention this to illustrate both the need for the fund and the differences between it and other programs.
 
Programs like US Small Business Administration loans may provide loan guarantees to businesses which might not otherwise qualify for bank financing. The Ness Fund targets economic development and although it seeks to provide funds to needy businesses this Board is very aware of their fiduciary duty to insure repayment. The banks take some of the risk of repayment and the Fund may require additional loan guarantors.
 
The in depth questioning of the prospective recipients ran long and the meeting lasted over an hour past the scheduled end.
 
At the end of the day, $800,000 of new loans were approved with the creation of approximately 50 new jobs.
 
I get back in time to participate in the English cafe then a quick dinner and back to the room to edit the photos I’ve been taking.
 
My day is ending at 11:15, a long but exciting day.  At least I get to sleep until 7:30.
 
Howard Schneider