Named Loan Funds – How it Works
Dedicating a Named Loan Fund
Israel Free Loan Association offers donors the opportunity to create an interest free loan fund in the name of anyone they wish. We call these “Named Loan Funds” and IFLA currently manages hundreds of such funds ranging in size from several thousand dollars to several million. Named Loan Funds start from $10,000 in cumulative donations. Click here for the form to establish a Named Loan Fund and here to make a donation.
Donors often dedicate a loan fund in the name of a loved one or friends in honor of a birthday, special anniversary, wedding or bar/bat mitzvah. These perpetual funds are an excellent way to remember and be remembered. Others create a fund through their will, leaving a legacy gift.
Each loan is allocated from a specific Named Loan Fund via a personalized application card with the name and number of the fund in both English and Hebrew printed at the top. All repayments are credited to the fund.
A detailed report is sent annually (or any time upon request) showing the number of loans made from the fund, payments returned and monies available for new loans at the time of the report.
A Perpetually Growing Gift
Over time, due to constant recycling of repayments, donations have a “helping value” worth several times the original gift. The assistance rendered by a loan fund grows perpetually because as loan repayments are returned to their account they are reissued to waiting applicants. This is the special beauty of the free loan concept – a recyclable resource that progressively helps more and more people over time. Click here to donate now or here to establish a loan fund.
IFLA manages all financial administration aspects of the Named Loan Funds including:
- Borrower credit check
- Background checks of guarantors
- Loan application administration including all official signatory requirements of both guarantors and borrowers
- Issuance of checks to borrowers from the fund
- All relevant bank account coordination for collection of funds
- Maintenance and collection of monthly payments
IFLA has a default rate of less than 0.7 %. Administrative costs are covered in five ways. Borrowers pay a nominal service charge for the loan. Specific overhead donations are also used for this purpose. IFLA receives fees from other organizations for which it provides back office services. Any interest accrued on funds deposited in IFLA bank accounts when capital is between deployments is used to cover costs. In addition, a modest management fee is deducted from the fund at the end of each fiscal year.
Sustainable Simcha (joyous occasion) and Support: Stephen and Faith Cohen
Stephen and Faith Cohen of Ma’aleh Adumim, Israel, recently celebrated their 57th wedding anniversary. In 1997, for their 40th anniversary, instead of presents, their children established a fund at the IFLA in their parents names and asked friends and family to contribute. “My daughter got a hold of my address book without my knowledge and started calling friends and family. It was a total surprise. I was astounded by the number of people who gave, including people with whom I had not been in contact for years, both here and abroad.” “We continue to receive an annual update from IFLA. It’s been one gigantic, gorgeous gift that’s been very meaningful and satisfying for us,” says Faith. The Cohen’s fund continues to grow as over the years family members continue to contribute on special occasions.