Small businesses that suffered economic losses when the owner or a key employee was called up to active duty are eligible to apply for a low interest loan of up to $2 million from the U.S. Small Business Administration, the agency announced Monday.
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.
Puerto Rico and U.S. Virgin Islands District Director Yvette T. Collazo added that “local small business owners with essential employees who have been called to active duty are encouraged to take advantage of this low-interest, long-term financial assistance program, specifically designed to help them overcome the potential economic hardship brought on by military deployments.”
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.