Small businesses who support their nation and community by hiring reservists and members of the National Guard sometimes face economic hardships themselves when those employees are called up to serve. Fortunately, the U.S. Small Business Administration has announced that in many of these cases, the small business may be eligible to apply for a low interest loan of up to $2 million.
Small businesses can apply for a Military Reservist Economic Injury Disaster Loan (MREIDL) any time from the date of notice of expected call-up and ending one year after the date of discharge or release. The program was created to enable eligible small businesses to pay operating expenses it could have covered if the owner or key employee hadn't been called to active duty.
"The absence of just one employee whose expertise is critical to the success of the company can pose significant challenges for a small business," said SBA Acting Administrator Jeanne Hulit.
"These Military Reservist Economic Injury Disaster Loans provide funds that will help these small businesses cover operating expenses. This way our brave men and women in uniform don't have to choose between serving their country and growing their businesses."
The MREIDL is a direct working capital loan, managed by SBA's Office of Disaster Assistance. The interest rate on these working capital loans is 4 percent, with terms up to a maximum of 30 years. In general, no collateral is required to secure an MREIDL of $50,000 or less. The loan cannot be used to replace lost income or profits, refinance long-term debt or to expand the business.
Businesses can apply online at http://go.usa.gov/BcuA.
In addition to the MREIDL program, the SBA supports veterans starting and growing their businesses through its 68 local SBA district offices, 15 Veterans Business Outreach Centers nationwide, its partnership with 63 Small Business Development Centers (SBDCs) with over 900 outreach locations, and 12,000 SCORE volunteers.