The Jewish Agency has joined forces with Israeli and American donors to establish a new relief fund for small businesses in northern Israel that have been affected by the war, offering thousands of businesses loans through a fast-track application process.

The low-interest loans — worth on average of NIS 200,000 ($54,8000) and up to NIS 650,000 ($178,000) — will also include an interest-free grace period for the first two years of the six-year loans, Doron Almog, chairman of the Jewish Agency told eJewishPhilanthropy.

The initiative is being supported by Israeli businessmen and philanthropists Idan Ofer and Udi Angel, the Jewish federations of Detroit and Pittsburgh and Bank Hapoalim.

Most of the businesses are in the tourism and tourism-related sector, which has been one of the hardest-hit sectors in northern Israel, where the economy is largely based on businesses in agriculture and tourism, Almog said. Tourists are beginning to trickle back up to the north following the cease-fire agreement between Israel and the Hezbollah terrorist group in Lebanon. (Indeed, this week saw its first group of Birthright Israel participants visit northern Israel since the start of the war, the organization said on Monday.) Yet the businesses are still in need of support until larger groups of tourists from abroad return.

“The idea is to support small businesses in the north of Israel. This is crucial oxygen for these small businesses,” Almog said, noting that some 60,000 people have been evacuated from their homes in the north since Oct. 7, 2023. “They need oxygen, they need a bridge for this very difficult period.”

Ofer and Angel have donated the first $1 million and Bank Hapoalim has contributed another $6 million to the fund, he said, and the fund will shortly be opened for applications.

In addition, the two federations will contribute about $400,000 of their already existing Jewish Agency donations to the fund, said Tamar Day, the Jewish Agency’s director of business development. Both the Jewish Agency and Bank Hapoalim have also agreed to share the costs of any defaults— with the former paying 65% of any failed loan.

“This is big news because until now the fund [normally] takes on itself all of the failure. Now we’re going to have a model that is going to be a combination, which is really important because then the money that we have in the fund can help more businesses,” Day said.

The fund aims to provide direct assistance without the bureaucratic hurdles typically associated with government or traditional banking systems, she said, and will go directly to the small business owners who need help the most and who would be considered high risk under most bank underwriters because of their location and industry, and would therefore be unable to receive favorable loan conditions.

She said the loans are intended to allow business owners to rebuild damaged infrastructure and maintain some level of cash-flow until the economy recovers.

Almog said the collaboration between the Jewish Agency with Angel and Ofer is part of a growing trend begun since Oct. 7, 2023, in which the Jewish Agency has provided funds to help thousands of businesses affected by the war through grants and emergency loans. This has been done mainly in partnership with the Jewish Federations of North America but also with the support of Israeli businesspeople who are looking to contribute to the national effort and rebuild the Israeli economy.

“Jews in the world don’t have the privilege of getting tired where we need the endless energy to continue building the state of Israel,” Almog said, as far as donor burn-out is concerned.

According to the Jewish Agency, this initiative represents another step in their ongoing support for thousands of small businesses affected by the war through emergency grants, special loans, and business guidance — in the border communities, in the north, and for reservists’ businesses across the country. Since Oct.7, more than 8,000 businesses that were impacted during the war have received assistance in grants and emergency loans, totalling approximately NIS 350 million ($95.8 million).

“It is really important for us in the Jewish agency to not only think about emergencies,” said Day. “Now we are seeing how we can rebuild the economy in the north.”