Under new rules, a small business can now apply for a Military Reservist Economic Injury Disaster Loan (MREIDL) on the date the essential employee receives notice of the expected call-up, according to information from J.J. Keller & Associates, the regulatory and safety compliance experts.
An “essential employee” is an individual whose managerial or technical skill is critical to the successful daily operation of the business. The application period is extended to one year after the essential employee is discharged from active duty, an increase from the previous 90-day application window.
In addition, the small business is no longer required to pledge collateral to secure a MREIDL of $50,000 or less. Previously, the business was required to put up collateral if the loan amount exceeded $5,000. The Small Business Disaster Response and Loan Improvements Act, passed in May 2008, also increased the MREIDL cap from $1.5 million to $2 million. The interest rate on these working capital loans is 4 percent, with terms to 30 years.