Loans temporarily help reservists
by Staff Sgt. Michelle Thomas
American Forces Press Service
1/5/2004 - WASHINGTON (AFPN) -- Overseas deployments can be tough on families. Naturally, the initial focus falls upon the emotional cost of separation. But, for guardsmen and reservists who own small businesses, the cost involved in a deployment takes on a whole new meaning.
For the past two years, the U.S. Small Business Administration's Military Reservist Economic Injury Disaster Loan program has provided loans to eligible small businesses to cover operating costs that cannot be met after a key employee is called to active duty.
Often the "key employee" is the business owner, whose family depends on the income generated from the company.
When Rick Parsons, who is assigned to the 401st Civil Affairs Battalion from Churchville, N.Y., deployed last year to Afghanistan, his veterinary practice took a major hit. Mr. Parsons and his wife, Marla, ran the hospital, with Mr. Parsons serving as its only veterinarian responsible for performing all surgeries, exams and emergency treatments.
"During the year prior to Rick's deployment, we tried to hire a full-time vet," Mrs. Parsons said.
When Mr. Parsons received his deployment orders, the search became even tougher.
"People were hesitant to work as the sole vet in a small practice," Mrs. Parsons said. Finding a full-time vet was next to impossible. As a result, the Parsons hired part-time veterinarians, but the business ultimately suffered.
When Mr. Parsons realized he could be on active duty for more than a year, he applied for assistance through the loan program.
"Many small businesses have had to cope with the loss of know-how and have been hurt financially by the absence of a key employee during the recent call-ups," said Hector V. Barreto, Small Business Administration administrator. "This loan program has helped many businesses survive, and the SBA will continue to support these dedicated men and women who have made such a great sacrifice in the course of serving their country."
Small businesses like the Churchville Veterinary Hospital may apply for loans of up to $1.5 million if they have been financially affected by the loss of an essential employee. These working-capital loans may be used to pay operating expenses that otherwise could have been covered if the reservist or guardsman hadn't been called to active duty. The loans cannot be used to refinance debt or expand the business, and the Small Business Administration determines the amount of economic injury.
The filing period for the loans ends 90 days after the date the business owner or key employee is discharged from active duty. Now that Mr. Parsons has returned home from active duty, his wife said their business is still in a crunch because, as with any loan, the money has to be paid back.
To pay back the loan, the Parsons hired a full-time veterinarian to run their practice while Mr. Parsons took a job at a local university.
But Mrs. Parsons said the loan program provided some vital financial assistance when she and her husband needed it.
"We probably would have lost the practice if (the SBA) hadn't lent us the money," she said. |
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