Gesher lifeline extended for another six months

The economic devastation that COVID-19 has wrought on the Jewish community has been extensive and potentially devastating, but some have been rescued by the Gesher Fund, which offers interest-free loans to struggling Jewish-owned small and medium-sized enterprises (SMMEs).

Now, the fund has been given a six-month extension to continue to help Jewish-owned businesses battling through the storm of lockdown, an unstable economy, and civil unrest.

“The pandemic devastated my business on every level,” says one medium-sized business owner in the hospitality industry, speaking on condition of anonymity. “In a split second in March 2020, three months of business was swept from under my feet. It’s a distressing experience having to ask for help, especially when you are an independent person. But having said that, I had to get over myself and ask for help – I have a responsibility to my staff. Gesher gave me the financial leeway to remain operational and pay staff and utilities. I wouldn’t have survived without the Gesher cash injection.”

As the pandemic continues to take lives, it also takes livelihoods, and Gesher is there to build a bridge for businesses that need to get to the other side.

“We have the resources available, and are anxious to get it to qualifying SMMEs. We are in a window now where many need funds quickly,” says Martin Sacks, the chairperson of Gesher and a member of the board of governors of the Chevrah Kadisha.

“We kicked off our work just more than a year ago. At the time, we never thought we would be in this situation as long as we have been. We were initially given a mandate from our donors to advance interest-free loans for 12 months, and collect loans within 30 to 36 months thereafter,” he says.

“When we came to the end of the initial loan-granting period at the end of May, we sat down with our founding donors – the Donald Gordon Foundation and our other cornerstone donor, and the Chevrah Kadisha (the Chev). We discussed small businesses in the context of the third wave.

“Existing borrowers were under tremendous pressure to make their repayments, and we were approached by many new SMMEs which had been impacted by the third wave. In this context, we were kindly given a six-month extension to our mandate by our generous founding donors and the Chev. We have reopened our facilities to SMMEs who qualify. The criteria are the same as before, and we are glad to continue to provide assistance.”

The borrower quoted above says applying for a loan wasn’t simple, but it was worth it. “To survive, I had to go through the process. The help I received from the accountant/mentor assigned to my case was warm and engaging, and so supportive.”

She advises others that, “If you feel your business has longevity and the potential to beat on through these violent currents, then I would advise you to ask for help. I have totally restructured and re-invented my offering, and ‘pivoting’ was central to survival. It’s emotionally exhausting, and teetering on the brink of a depleted bank balance each month is scary, but knowing Gesher is there is a huge comfort.”

“The pandemic had a big impact on my business,” says another small business owner and single mother speaking on condition of anonymity. “From an established business of 25 years, we essentially collapsed and almost had to start from the beginning. I am in my shop seven days a week. Many days there have been no sales or customers. I’ve cried many days and nights.

“The highest turnover we had after opening the store after lockdown was only 20% of my usual turnover. If not for the Gesher Fund, I don’t think I would have survived. I pumped as much of the money as I could into the business. I immediately paid my debt to suppliers, and my rent, which was three or four months behind. People started trusting me again. Sitting in credit with suppliers isn’t simple. Things are tough again, but I make sure my loan repayments are made on time. I would definitely recommend Gesher to small businesses. To have no interest on the loan is phenomenal.”

Sacks pays tribute to the many volunteers behind the scenes who evaluate applications and provide assistance and advice to borrowers. “We have continuing remarkable involvement from more than 40 volunteers, including our board, credit committees, and panel members. It’s a significant and highly capable infrastructure that didn’t exist in the community before. On the back of this, we are considering scenarios for Gesher to support the sustainability of small businesses in our community in the longer term. Most of our community is self-employed, and we feel that the key to the sustainability of the community is small businesses surviving and thriving.”

They are therefore talking to all key stakeholders and examining the requirements for capital and infrastructure to sustain such work. “Within the Chev and the community, there are huge demands for funding at the moment, and it’s important that any capital that Gesher continues to deploy is done so effectively and with a measurable long term benefit.”

Sacks says that so far, they have made more than 130 loans. With Gesher reopening, that will probably go up to about 150. He says borrowers obviously come from the industries hardest hit by lockdown such as tourism, leisure, and hospitality, but also across the business and professional-services spectrum including industries one may not expect. “Many businesses spin off those worst affected, and are therefore impacted,” Sacks says.

Borrowers come to Gesher as a “last resort”, often exhausting the options of business funding, banks, or family support. “There are different levels of desperation, but after a prolonged period of forced business slow down and a tough economy to start with, they don’t have capital resources. They need funds for basic subsistence – this isn’t growth investment, it’s about sustaining the business, funding working and operating capital.

“There is a reluctance to step forward as many people don’t want to rely on donor funds,” he says. “They’ve done the hard yards in starting their own business; they are surviving and supporting workers and their families. Most of our borrowers have at least five employees, and some have hundreds. But there shouldn’t be any form of stigma. We’re just helping until they can get back on their feet. In many countries, there is much more small-business support. There’s unfortunately nothing significant here. Businesses may have been better able to withstand the shock of the pandemic and lockdowns if they had come into the pandemic off the back of a stronger economy.

“The majority will survive, and get through with support,” Sacks says. “This isn’t a grant, it’s an interest-free loan. We’re looking for businesses that will survive. Sometimes it’s beyond their control. Fundamentally, we want to help the most people we can, which includes employees from the broader community.”

Sacks says that as we’ve seen in the current civil unrest, the business environment is volatile and can change from one moment to the next. “People are resilient and hard working. But without capital, there’s very little one can do. So they’re providing ingenuity, and we are filling the capital gap where we can. Speed is of the essence – you can resolve a lot of issues if you have capital. For example, being able to pay a supplier half of what you owe shows that you are ‘coming to the party’, and they keep the supply chain going. Our capital can provide a lifeline for a long time and get a business back onto a more stable footing.”