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SBA Disaster Loans: Military Reservists Economic Injury Loans

Bovo Law Sept. 19, 2013

According to the The Military Reservist Economic Injury Disaster Loan (MREIDL) SBA Disaster Loans: provides funds to help an eligible small business meet its ordinary and necessary operating expenses that it could have met, but is unable to, because an essential employee was called-up to active duty in his or her role as a military reservist.

Loan Amounts and Use

The maximum MREIDL loan amount is $2 million. The amount of each loan is limited to the actual economic injury as calculated by SBA. The amount is also limited by business interruption insurance and whether the business and/or its owners have sufficient funds to operate. If a business is a major source of employment, SBA has authority to waive the $2 million statutory limit.

The purpose of MREIDL loans is not to cover lost income or lost profits. MREIDL funds cannot be used in lieu of regular commercial debt, to refinance long-term debt, or to expand the business.

Eligibility and Terms

Businesses with the financial capacity to fund their own recovery are not eligible for MREIDL assistance. Federal law requires SBA to determine whether a business has credit available elsewhere — that is, if credit in an amount needed to accomplish full recovery is available from non-government sources without creating an undue financial hardship.

The filing period for MREIDL assistance begins on the date the essential employee receives a notice of expected call-up and ends one year after the essential employee is discharged or released from active duty.

Collateral is required for all MREIDL loans more than $50,000. SBA accepts real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but will require the borrower to pledge collateral that is available.

The MREIDL interest rate is 4 percent and has loan repayment terms up to 30 years. SBA determines the term of each loan in accordance with the borrower’s ability to repay.

How to Apply

You can apply online for an SBA MREIDL. You must submit the completed loan application and a signed and dated IRS form 8821 giving permission for the IRS to provide SBA your tax return information.

For additional information, please contact the SBA disaster assistance customer service center. Call us (TTY: 1-800-877-8339) or email