Funds Available To Assist Businesses Affected By Deployment
Small businesses are often hard hit when vital employees are called up for active duty. Service Members who own small businesses are often served up a double whammy. But there is a program that many people are unaware of, that may provide some relief.
There is a program for small businesses, called the Military Reservist Economic Injury Disaster Loan Program (MREIDL). This program provides funds for small businesses that are often hardest hit by impending employee Military deployment. Small businesses that have financial shortfalls due to an essential employee being called up for Military Service are eligible.
These loans are intended to provide funds to shore up necessary business expenses. While not designed to provide for lost income or lost profits, these funds can help provide working capital for a small business affected by such a deployment.
The period for filing for one of these MREIDL loans begins the day an essential employee is ordered to active duty. The period ends ninety days after this same employee is released from active duty, or discharged. (The program applies to deployment occurring after March 24th, 1999).
Administered by the Small Business Association, these loans are intended to supplement other credit sources. Credit that is available from Non-government sources is often sufficient to meet the needs of many Small Businesses that have a vital or essential employee called up for Military Service.
But when it doesn’t, then this loan may provide much needed relief. As a rule, about ninety percent of applicants to this loan program are not able receive enough funds from Non Government sources, so this program was created to address that shortfall.
Created by Congress, the MREIDL loan program is a method that can be used by many businesses to prevent failure while their vital employees are called into service.
Loans less than five thousand dollars in value do not require any kind of collateral. Loans greater than five thousand dollars require the pledging of collateral to the extent it is available. This is done to ensure loans are eventually repaid, as all loans are taxpayer subsidized.
Credit requirements are fairly standard, to the extent they insure that monies loaned are repaid. Collateral can include the first or second mortgage on a business property. The interest rate for these loans is intentionally low, capped by law at 4%.
The application process is not overly complicated. And, best of all there is free assistance in helping to apply, courtesy of the Small Business Association.
For More information, Contact the Federal Small Business Association at: http://www.sba.gov
Or via telephone at: 1-800-U-ASK-SBA (1-800-827-5722)