How to Apply for a Military Reservist Economic Injury Disaster Loan

Three Parts:Meeting Loan QualificationsCompleting Your ApplicationClosing on Your Loan

The Military Reservist Economic Injury Disaster Loan (MREIDL) helps small businesses cover operating expenses when there is a shortfall as a result of an essential employee who is a military reservist being called up to active duty. The loan is serviced by the U.S. Small Business Administration (SBA), and can provide up to $2 million of assistance for eligible businesses. To apply for an MREIDL, you must submit information about your essential employee and your business's finances to the SBA.[1]

Part 1
Meeting Loan Qualifications

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    Have an essential employee who is a military reservist and is called up for active duty. An essential employee is someone whose managerial or technical expertise is crucial for your business to function on a day-to-day basis.[2]
    • This person doesn't necessarily have to be an owner of the business. They could be your general manager or hold some other title.
    • The person must receive orders that they are being called into active duty during a period of military conflict.
    • The period of military conflict may include an actual declared war, a national emergency declared by congress or the president, or any other military operation such as peacekeeping operations.
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    Determine whether financial assistance is available elsewhere. The SBA's MREIDL should be considered a last resort. If you can get a loan from a commercial lender to cover your need, you aren't considered eligible for the loan.[3][4]
    • While there's no requirement that you actively seek out loans from private sources, keep in mind that the SBA will evaluate whether you have other financing options available.
    • If you do have other options available that would meet your need, the SBA may determine you aren't eligible for the MREIDL.
    • For this reason, it's a good idea to do what you can to make sure that you don't have any other way to cover the financial shortfall you will experience as a result of the loss of your essential employee when they are called up to active duty.
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    Assess your potential economic injury. You must analyze your business's expenses to determine what portion of your operating expenses can't be met as a result of the military reservist being called up into active duty.[5][6]
    • When you apply for the MREIDL, you will have to submit financial documents, including profit and loss statements and detailed lists of your business's expenses and liabilities.
    • Keep in mind that the MREIDL is not designed to make up for profit loss. The SBA will analyze your business's financial records to determine what economic injury you will suffer.
    • If your loss of the essential employee will cause a loss in profits, but not to such an extent that you cannot pay your business's debts and basic operating expenses, the SBA typically will determine that you don't need an MREIDL.
    • The purpose of an MREIDL essentially is to keep your business on "pause" until the essential employee returns. If the SBA determines you're eligible, you'll get funds to cover necessary obligations, but not to refinance or consolidate debts or expand your business.
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    Check the applicable filing dates. You cannot apply for an MREIDL until the military reservist gets notice that they are being called up. From that date, you can apply for the loan anytime while they are on active duty or up to a year after they've been discharged.[7][8]
    • While you become eligible to file an application from the date of the notice, you should keep in mind that if your application is approved, funds won't be disbursed until the essential employee actually leaves for active duty.
    • Because the MREIDL is considered a last-resort option, and because you'll have to do quite a bit of financial forecasting to determine your need, in many situations it may be best to wait until the person leaves and see what happens.
    • If you apply for an MREIDL soon after the essential employee leaves, and the SBA declines your application, you typically have the option of reapplying later. A second application may be a sound option if the reasons for the SBA's denial are later eliminated.
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    Review your credit. When you apply for the loan, the SBA will check your credit and the credit of your business. While the SBA doesn't publish a certain minimum credit score that is required, the administration must have reasonable assurance that you can and will repay the loan.[9][10]
    • Credit-worthiness may be tied to your ability to get funding from other sources. If you have a high credit score, there typically is a greater chance that the SBA will decide you don't need an MREIDL because you could get adequate funding elsewhere.
    • Regardless, you want to have a good idea of what's in your business's credit report before you apply for a loan of any significance, including an MREIDL.
    • Keep in mind that business credit reports work differently than personal credit reports, and your business may not have many entries even though it has years of credit history, because information is submitted voluntarily.
    • You also don't have the right to a free copy of your business credit report, as you do with a personal credit report. You must contact the reporting agencies directly, and typically have to pay a fee to get a copy.
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    Consider what collateral you have available. Federal law requires collateral for all loans over $50,000. Having collateral you can pledge does not increase the chances your loan will be approved. Likewise, the SBA won't decline a loan solely for lack of collateral.[11]
    • The SBA will accept real estate as collateral if your business owns property and has any equity in it.
    • Collateral also may include other business assets such as motor vehicles, office equipment, or fixtures.
    • Keep in mind that while the SBA won't decline your application, the amount of collateral you have available may impact the amount of money the SBA lends you.

Part 2
Completing Your Application

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    Download the application forms. While you can complete a loan application online and submit it electronically, you may want to download a paper form before you start so you can find out what information you will need.[12][13]
    • The paper form includes government privacy disclosures as well as filing instructions that may benefit you. Use the instructions as a checklist to ensure you've prepared all the required documents to submit in your application package.
    • The SBA gives you the option of applying online and submitting all of your information electronically.
    • You also can fill out and mail paper forms, but keep in mind if you decide to go this route that the processing time may be considerably delayed. Not only do you have to factor in mailing time, but paper documents are more difficult to share among those reviewing your application.
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    Gather information. There are a number of documents that you must copy or prepare to submit along with your application, including financial statements, forecasts or estimates of the economic injury caused by the call-up of your essential employee who is a military reservist.[14][15]
    • If you have difficulty completing the financial estimates required for the loan, you may want to consult an accountant for assistance in preparing these statements.
    • You must include a copy of the notice received by the essential employee calling them up to active duty.
    • You also need two written statements – one from you as the business owner and one from the military reservist who has been called up to active duty – stating that this person is essential to the day-to-day operations of the business.
    • Along with business income and loss statements, you must include a written explanation of how this essential employee's call up to active duty will cause substantial economic injury to the business, along with an estimate of the injury your business will experience. #Complete your loan application. The application itself requires you to provide the SBA with information about your business, including names and contact information for all owners of your business, and to describe the economic injury that you face.[16][17][18]
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    Fill out a tax transcript request form. All MREIDL applications must be accompanied by complete copies, including all schedules, of the most recent federal income tax returns for the business.[19][20]
    • If you don't have a copy of your most recent tax return, you must explain to the SBA why it isn't available.
    • Additionally, the SBA requires you to complete IRS Form 4506-T, Disaster Request for Transcript Return, and submit it along with your application and other documents.
    • If you download Form 4506-T from the SBA's website, it's partially filled out to identify the years of the transcripts you're requesting and where those transcripts must be sent.
    • The only part you have to complete is the name, address, and EIN of your business. Then you can sign and date the form.
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    Submit all required documents. If you're completing your application online, you will be prompted to attach other forms or information not included in the application. If you want to file a paper application, you should follow the filing instructions that accompany the application form.[21][22][23]
    • Make at least one copy of every document you submit to the SBA for your records, and keep them all together with copies of any emails or other correspondence you receive from the SBA regarding your loan request.
    • If you have any questions or concerns about your application package, you can contact the SBA's customer service center at 1-800-659-2955, or by email at
    • Customer service cannot advise you on how best to complete your application documents, but they can answer questions about the type of information you'll need to complete the forms.

Part 3
Closing on Your Loan

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    Receive notification of loan approval. After the SBA reviews your paperwork and assesses the needs of your business, it will send you written notification of whether your request was approved or denied.[24][25]
    • The SBA typically makes a decision on MREIDL applications within 7 to 21 days of the date the application is received.
    • If the SBA declines to issue you a loan, your notice will include the reasons for the SBA's denial.
    • If your loan was approved, your notification will include details about the amount and term of the loan.
    • The interest rate for all MREIDL loans is 4 percent. The maximum term of the loan is 30 years, but the SBA will set the term of your loan based on its analysis of your financial projections and your ability to repay.
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    Get any required insurance. If you are approved for an MREIDL, you must maintain adequate insurance, including insurance of all collateral you have pledged to secure your loan. This may require getting additional insurance for the life of the loan.[26]
    • The SBA requires you to maintain hazard insurance on any collateral. This insurance is required for the protection of both you and the SBA.
    • Your approval document will describe the amount of insurance you must have, and the required deductibles.
    • If the property is located in a flood hazard area, you also must purchase flood insurance for the full insurable value of the property.
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    Complete the closing paperwork. When your loan is approved, the SBA will let you know what additional documents it must receive before funds can be disbursed. If the military reservist has already left for active duty, you may get your money as soon as all documents are received.[27]
    • Once the SBA receives the additional documents requested, which may include proof of insurance on collateral property, your loan funds are ready for disbursal.
    • If you applied for your loan when the military reservist received notice that they were being called up, but they haven't left yet, the SBA won't disburse your funds until they actually begin active duty.

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