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1/30/2003

Dollar duty

By Pam Mellskog
The Daily Times-Call

DENVER — Of the 500,000 “citizen soldiers” in the United States, nearly 79,000 National Guard and reserve-duty military personnel — 850 of them in Colorado National Guard alone — have been called up and are now serving in the war against terrorism, according to Denver-based National Guard spokeswoman Capt. Holly Peterson.

But their presence in uniform generally means an absence in the civilian workforce, something the federally funded Small Business Administration seeks to mollify with Military Reservist Economic Injury Disaster Loans.

Loans of up to $1.5 million, with a 4 percent interest rate cap, can be granted to small businesses that lose essential employees, defined by SBA as those “whose managerial or technical expertise is critical to the successful day-to-day operations of the small business.”

But since the Sept. 11, 2001, attacks and subsequent call-up waves, too few small businesses have applied, according to Chris Chavez, SBA’s regional communications director in Denver.

As of mid-January, 32 loans to small businesses nationwide for a total of $2.9 million in relief had been awarded, according Fort Worth-based SBA spokesman Mike Lampton. However, just one Colorado small business — an undisclosed Denver organization — applied, with a loan for $31,600.

“It is really not a very well-used program, even though we advertised it quite a bit,” Chavez said. “But there are quite a few reservists in Boulder County that probably need the service.”

As of October, when the SBA put the loan application online, the service has never been more available, he said.

This form differs little from the paperwork associated with a conventional bank loan, Lampton said, and may be used to pay fixed debts, payroll, accounts payable and other bills that would go unpaid because of the financial impact of losing a key employee to reservist duty.

However, the loan may not be used to refinance long-term debt, expand the business or replace regular commercial debt.

To qualify, the applicant must justify “substantial economic injury.” Hardships suffered from personnel lost to active military duty

must be great enough to keep the small-business applicant from meeting typical financial obligations.

The filing period begins on the date the essential employee is ordered to active duty and ends 90 days after the date the employee is discharged from active duty. Application turnaround time is from seven to 21 days.

Additional, loan-specific application information includes:

•A copy of the essential employee’s “orders” for active duty or a copy of their discharge or release papers from active duty status.

•A statement from the small-business owner that the reservist is essential to the day-to-day operations of the business, along with a written concurrence by the essential employee.

•A written explanation and estimate of how the essential employee’s activation to military service has resulted or will result in the small business experiencing substantial economic injury.

•A description of the steps the business is taking to alleviate the economic injury.

•A certification from the business owner that the essential employee will be offered the same job or a similar job upon return from active duty.

Pam Mellskog can be reached at 303-776-2244, Ext. 224, or by e-mail at pmellskog@times-call.com.