A federal program makes loans more accessible for small-business owners called to active military duty.
A federal initiative unveiled this week seeks to help military reservists keep their businesses afloat after being called to active duty.
The move abolishes collateral requirements for loans below $50,000 under the Military Reservist Economic Injury Disaster Loan program, raising the current threshold from $5,000, the Small Business Administration announced Wednesday.
The agency also increased the maximum loan limit from $1.5 to $2 million and extended the application deadline to a year, up from just 90 days.
"That adds a lot of flexibility," said James Rivera, the agency's deputy associate administrator for disaster relief.
With interest rates at four percent and terms up to 30 years, the program offers small businesses an alternative to unsecured bank loans, Rivera said. “That’s the beauty of the program," he said. "We have lower interest rates and longer terms."
Loans received under the program go towards working capital to cover operating costs while an owner, or a key employee, is serving abroad. Over the past six years, the agency has approved 305 loans under the program for a total of $27 million.
Small-business owners can apply through the agency's disaster relief website.