June 8, 2006
Chris Chichester (Snowe), 202-228-5843
Dan Whiting (Craig), 202-224-2752

(Washington, D.C.)  U.S. Senator Olympia J. Snowe (R-ME), Chair of the Senate Committee on Small Business and Entrepreneurship, and Senator Larry Craig, Chairman of the Senate Committee on Veterans' Affairs, introduced "The Patriotic Loan Act of 2006" (S. 3122), legislation that improves the Small Business Administration's (SBA) Military Reservist Economic Injury Disaster Loan (MREIDL) program, raises the maximum loan amount for military reservists from $1,500,000 to $2,000,000, permits the SBA Administrator to offer military reservist loans up to $25,000 without requiring collateral and ensures that these eligible small businesses receive priority loan application processing and approval. 

?As our soldiers are called to serve America, the small businesses they temporarily leave behind often suffer,? said Senator Snowe.   ?Many small businesses experience slowing production and lost sales or incur additional expenses to compensate for an employee's absence. As a result, self-employed Guard and Reserve members carry a disproportionate and unfair burden in fulfilling their duty.  Congress must do everything within its power to reduce this burden.  The Patriotic Loan Act of 2006 achieves that goal.?

?Our men and women in uniform already sacrifice more than enough by serving our country in times of need,? stated Senator Craig.  ?They shouldn't have to sacrifice their jobs and businesses as well.  By increasing the amounts of these loans and streamlining the process, we can help ease the burden of these brave men and women, and hopefully give them one less thing to worry about.?

Senator Snowe and Senator Craig noted that over the last five years, 550,000 military reserve troops have been called to serve on active duty by the Department of Defense. As a result of larger and more frequent call-ups, many small businesses have been forced to go without their owners and key personnel for months, and sometimes years.    The impact has been devastating to these patriotic small firms, as the majority of non-government employed Guard and Reserve members are either self-employed or work for a small business.  

To improve the SBA's MREDIL program, The Patriot Loan Act of 2006 would: 

• Raise the maximum loan amount from $1,500,000 to $2,000,000, which is the same level as the SBA's other loan programs, including the 7(a) loans, international trade loans, and 504 Certified Development Corporation loans.  
• Permit the SBA Administrator to offer loans up to $25,000 without requiring collateral from the Guard or Reserve Member. Currently, the SBA offers military reservist loans up to $5,000 without requiring collateral. 
• Expedite the processing of military reservist loans to ensure that effected small businesses receive the financing they need immediately, so as to mitigate any negative impacts a call-up may have on the small firm. 
• Require the SBA and the DoD to develop a joint website and printed materials providing information regarding this program and authorizes the SBA to advertise this program with the DoD as well as veteran's service organizations, trade associations for banks and lending institutions.
• Require banks and other lending institutions to refer the loan applicant to appropriate technical assistance programs offered by the SBA, including Small Business Development Centers, the Service Corp of Retired Executives, Veteran's Business Outreach Centers, and Women's Business Centers.
• Provide that within 6 months of the bill's enactment the SBA and the DoD shall jointly study the feasibility of subsidizing loan payments and fees paid by members of the Guard and Reserve and veterans on these loans. They will also be required to study business mobilization and interruption insurance programs for members of the Guard or Reserve who own or operate small business concerns, and the feasibility of creating an insurance program to repay debts to the SBA in the event of death or significant injury of a Guard or Reserve Member and increasing the utilization of Credit Unions affiliated with DOD in programs administered by the SBA. 

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