War squeezes businesses owned by reservists

By Thomas Ferraro

WASHINGTON (Reuters) - Having served in Iraq, Dave Krasner is now back home in Boston, struggling to keep alive the small computer consulting company he left behind.

"I love my country. But what do I do now?" said Krasner, a National Guardsman whose firm was buried in debt while he was away at war for much of 2004 and 2005. "My credit was wrecked. The SBA (Small Business Administration) turned me down for loans. So have banks. I can't face my children. They see me as a hero."

The 35-year-old father of four is among a growing legion of reservists who have returned from deployments of up to 15 months to see their small businesses in trouble, if not dead.

"When a reservist has to shut his business down because his credit plunged while he was serving in Iraq, Washington isn't keeping its promise to veterans," said Sen. John Kerry, a Massachusetts Democrat.

As chairman of the Small Business and Entrepreneurship Committee, Kerry is pushing legislation to give an increased hand to these part-time warriors and veterans who own small businesses or want to begin one.

It would: upgrade a 1999 economic disaster loan program for reservists; authorize a study on the needs of disabled vets interested in opening a business; and provide reservist small business owners with a grant of up to $25,000 and loans of up to $100,000 without collateral. It would also increase funding for the SBA's Office of Veterans Business Development.

An estimated 6 percent of the 1.1 million members of the National Guard and Army, Navy, Air Force, Marine Corps and Coast Guard reserves are self-employed.

"Just about everyone who is in business for himself or herself are hard hit when called up," said Peter Duffy of the National Association of Guardsmen, a nonprofit advocacy group.

Reservists include electricians, carpenters, accountants, corner grocery store owners and even doctors and lawyers with small practices.

Under U.S. law, reservists who work for someone else -- a private firm or local, state, or federal government -- have safeguards to get their jobs back. Yet those who work for themselves have no such guarantees.

With demands for more relief, the SBA recently began a pilot loan targeted to veterans, reservists and their spouses.

Kerry hailed it as a "good first step," but urged that its double-digit interest rates be lowered and said government must do more to publicize this and other such efforts.

Relatively few have sought a Military Reservist Economic Injury Disaster Loan, created by Congress in 1999 to help reservists who suffer major financial loses while serving their country.

From August 2001 through last March, the SBA's office of disaster assistance approved just 271 such loans, about 60 percent of those who applied, Elmore said.

Critics complain that the government has failed to adequately promote the program and that the hurdles are tough to clear. They include a limited period to apply for a loan.