Loan Privilege from the SBA

The Military Reservist Economic Injury Disaster Loan (MREIDL) program was developed to provide financial assistance to reservist employers. If your small business has been financially affected by the loss of essential employees called to active duty, you may apply for this loan through the Small Business Administration (SBA).

MREIDL Financial Assistance

For the past two years, MREIDL loans have helped sustain operating costs that could not be met by employers once the reservist(s) left for active duty. Loans of up to $1.5 million for a maximum of 30 years are available at an interest rate not to exceed 4 percent. The loan is intended to cover the amount of working capital needed for the employer to meet financial obligations until operations return to normal when the employee returns from duty.

Important information on MREIDL guidelines and loan applications in Adobe Acrobat PDF format can be downloaded from the SBA web site. The forms will ask you the same information any bank would request before lending you money.

Know the Filing Period

The filing period begins on the date the essential employee is ordered to active duty and ends on the date 90 days after the essential employee is discharged or released from active duty.

Submitting the MREIDL Loan Application

In addition to the financial information typically required in submitting a request for a loan, your application package must also include:

Copy of the essential employee’s military orders for active duty or a copy of the discharge or release papers from active duty status
Statement from the employer that the reservist is essential to day-to-day operations of the business along with a written concurrence by the employee
Written explanation and estimate of how the essential employee’s activation to military service has or will result in the small business experiencing substantial economic injury
Description of the steps the business is taking to alleviate the substantial economic injury
Certification from the small business owner that the essential employee will be offered the same job or similar job upon the employee’s return from active duty.

After you have completed the required forms, which can be accessed through the SBA web site, follow the filing requirements listed at the beginning of the application (SBA Form 5R).

The SBA’s decision on loan approval can occur within 7 to 21 days. Once approved, documents provided by the SBA are needed to close the loan. Once received, the SBA will disburse the funds in quarterly installments unless otherwise specified in your loan documents.