The Costco Connection
DataWorld President Dave Dougherty was worried, when Jeff McIntosh, his main computer expert, was called up two years ago to active duty in Baghdad. Not having McIntosh around meant Dougherty's Bethesda, Maryland company, which provides custom computer services to local television stations, faced losing hundreds of thousands of dollars in profits.
Fortunately, relief was available for Dougherty in the form of Military Reservist Economic Injury Disaster Loan (MREIDL) for $200,000 from the U.S. Small Business Administration (SBA). Dougherty says the loan is keeping DataWorld in business.
These loans help small firms cover operating costs that can't be met due to the loss of a key employee called to active duty in the reserves or National Guard.
"Many small firms have had to cope with the loss of knowhow and have been hurt financially by the absence of a key employee during the recent callups," says SBA Administrator Hector V. Barreto. "This loan program has helped many businesses survive."
MREIDLs of up to $1.5 million may be authorized to companies that have been financially impacted by the loss of an essential employee. These working capital loans may be used to pay necessary operating expenses that could have otherwise been covered. The loans cannot be used to refinance debt or expand the business.
The interest rate in February was 3.1 percent with a maximum term of 30 years. The SBA determines the amount of economic injury, the term of each loan and the payment amount based on the borrower's financial circumstances.
Businesses can download an application at the website http://www.sba.gov/disaster or get one from their local SBA office.