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P. 116
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FErleid TLAEOSNSFDERSIINSEINGNDMGSOT: HNEEYRISKS
PolWlocekiss
L ending money to a fellow Jew is a cannot afford the loss, a very unfortunate assist this needy person. Alternatively,
great mitzva, and it is one that situation has occurred. the borrower should be told to go to
many people have the opportuni- Ahavas Yisrael or to rabbis, who might
ty to do as friends or family mem- People who borrow have different have the funds to help. Furthermore,
bers ask to borrow money. The motivations. Perhaps some people are before lending, one should inquire 1)
especially kindhearted and per- unethical, but I think that the vast major- how the borrower intends to pay back
ceptive among us might even ity are simply desperate. The borrower and 2) to how many other people do you
notice a need before being asked means well and hopes that tomorrow will owe money to. Both questions are criti-
and offer a loan. Yet, although lending be brighter, but his hopes do not always cal if you want repayment.
money is very commendable, it some- pan out. When one is up against turn-off
times leads to a problem: lending money notices, empty gas tanks, and empty Financial Advice for Young Couples
to others and never seeing it back. This refrigerators, he or she needs a cash infu- Young couples need a special warning.
problem especially concerns the frum sion. How to handle this pressing need is With youth comes naïveté. Newlywed
world because people trust each other. I the question. couples are prey because they obviously
have pondered this sensitive topic for a have wedding money. Among other
long time. First of all, I encourage you to Using Gemachs financial teachings to young people
read Ahavas Chesed (available in One way to lend is to lend the money to should be included the admonition not
English), in which the Chofetz Chaim a local gemach, which will in turn lend to lend any money beyond your charity
deals in depth of the mitzva of lending the money to the borrower. Gemachs ability. Never.
money and implores people to set aside demand two cosigners and are experi-
funds for their own lending gemach. It is enced in setting up these deals. A Business Lending
a sacred practice to lend money instead gemach might reject a cosigner if they A person borrows money for his busi-
of giving charity because it allows the feel that this cosigner lacks the ability to ness. If the business is successful, the
recipient to save face. The understand- pay if needed. lender will be paid back without interest
ing is that, while the current situation or profit. If the business fails, the lender
does not allow for repayment, the bor- Cosigning a gemach loan is a great will never be paid. What is happening is
rower intends to repay the loan when he thing to do, but here, as well, understand that the lender is actually an investor in
is able to. that cosigning should only be done by the business. However, the lender is
those that have funds to pay if the bor- absorbing all the risk, and the borrower
The Problem rower defaults. is getting all the potential profit. The
What I would like to address is the situ- borrower should be upfront that this is
ation where loans are requested and a Bottom Line an investment in a business that may be
promise of timely re-payment is made. My advice is to never lend money that lost. It should be made very clear to the
For example, the borrower might say that you cannot afford to lose. You should be lender that start-up businesses are very
he will pay back when his tax refund certain that, in the event of non-pay- risky, with a significant chance of losing
comes in. Unfortunately, the refund ment, you can afford to consider that one’s money. Perhaps the borrower
might never come, or it might have been money charity and forget about it until should call this an investment instead of
promised to more then one lender. Even the lender’s situation improves – if ever. a loan.
if the tax refund arrives, there are of If someone requests a loan, and you do
course new bills the borrower has to deal not have available funds (read “available Due Diligence
with. The lender is left in the lurch. If he to never be seen again”), you should We have all heard of stories of people
refuse absolutely. A righteous person
may decide to take up a collection to
112 u www.wherewhatwhen.com u
FErleid TLAEOSNSFDERSIINSEINGNDMGSOT: HNEEYRISKS
PolWlocekiss
L ending money to a fellow Jew is a cannot afford the loss, a very unfortunate assist this needy person. Alternatively,
great mitzva, and it is one that situation has occurred. the borrower should be told to go to
many people have the opportuni- Ahavas Yisrael or to rabbis, who might
ty to do as friends or family mem- People who borrow have different have the funds to help. Furthermore,
bers ask to borrow money. The motivations. Perhaps some people are before lending, one should inquire 1)
especially kindhearted and per- unethical, but I think that the vast major- how the borrower intends to pay back
ceptive among us might even ity are simply desperate. The borrower and 2) to how many other people do you
notice a need before being asked means well and hopes that tomorrow will owe money to. Both questions are criti-
and offer a loan. Yet, although lending be brighter, but his hopes do not always cal if you want repayment.
money is very commendable, it some- pan out. When one is up against turn-off
times leads to a problem: lending money notices, empty gas tanks, and empty Financial Advice for Young Couples
to others and never seeing it back. This refrigerators, he or she needs a cash infu- Young couples need a special warning.
problem especially concerns the frum sion. How to handle this pressing need is With youth comes naïveté. Newlywed
world because people trust each other. I the question. couples are prey because they obviously
have pondered this sensitive topic for a have wedding money. Among other
long time. First of all, I encourage you to Using Gemachs financial teachings to young people
read Ahavas Chesed (available in One way to lend is to lend the money to should be included the admonition not
English), in which the Chofetz Chaim a local gemach, which will in turn lend to lend any money beyond your charity
deals in depth of the mitzva of lending the money to the borrower. Gemachs ability. Never.
money and implores people to set aside demand two cosigners and are experi-
funds for their own lending gemach. It is enced in setting up these deals. A Business Lending
a sacred practice to lend money instead gemach might reject a cosigner if they A person borrows money for his busi-
of giving charity because it allows the feel that this cosigner lacks the ability to ness. If the business is successful, the
recipient to save face. The understand- pay if needed. lender will be paid back without interest
ing is that, while the current situation or profit. If the business fails, the lender
does not allow for repayment, the bor- Cosigning a gemach loan is a great will never be paid. What is happening is
rower intends to repay the loan when he thing to do, but here, as well, understand that the lender is actually an investor in
is able to. that cosigning should only be done by the business. However, the lender is
those that have funds to pay if the bor- absorbing all the risk, and the borrower
The Problem rower defaults. is getting all the potential profit. The
What I would like to address is the situ- borrower should be upfront that this is
ation where loans are requested and a Bottom Line an investment in a business that may be
promise of timely re-payment is made. My advice is to never lend money that lost. It should be made very clear to the
For example, the borrower might say that you cannot afford to lose. You should be lender that start-up businesses are very
he will pay back when his tax refund certain that, in the event of non-pay- risky, with a significant chance of losing
comes in. Unfortunately, the refund ment, you can afford to consider that one’s money. Perhaps the borrower
might never come, or it might have been money charity and forget about it until should call this an investment instead of
promised to more then one lender. Even the lender’s situation improves – if ever. a loan.
if the tax refund arrives, there are of If someone requests a loan, and you do
course new bills the borrower has to deal not have available funds (read “available Due Diligence
with. The lender is left in the lurch. If he to never be seen again”), you should We have all heard of stories of people
refuse absolutely. A righteous person
may decide to take up a collection to
112 u www.wherewhatwhen.com u
