By Cliff White, Editor of Seafoodsource.com
The National Oceanic and Atmospheric Administration announced the opening of the application period for its Fisheries Finance Program, which will provide up to USD 100 million (EUR 88.2 million) in loans to the commercial fishing and aquaculture industries in the United States.
The program offers loan terms ranging from five to 25 years and competitive interest rates, according to Paul Marx, division chief of the financial services division of the National Marine Fisheries Service, a branch of the National Oceanic and Atmospheric Administration (NOAA).
“We can do loans for everything but building a new boat or activities that contribute to overfishing,” Marx said.
Loans are available to businesses involved in fishing, aquaculture, mariculture or seafood processing for the purchase or improvement of facilities or equipment. Companies wishing to use a NOAA loan to purchase a vessel may do so provided it is not new and does not increase overall harvesting capacity, Marx said. NOAA loans can also refinance existing debt that originated for purposes that qualify for new loans under the program’s standards.
Companies that apply for a loan must have three years of credible experience in the fishery or business the loan seeks to augment. If the business is reliant on permits, they must all be acquired and active for the loan application to be considered, Marx said.
“There are some limitations, but the program is generally pretty popular because we are able to provide 20-year fixed financing and our interest rate is quite stable – we charge two percent above the treasury borrowing rate,” he said. “The impression I get is that the private sector tends to offer variable rates more often than fixed, and while our interest rate tends to be a tiny bit higher initially, over the long-term, it’s a better deal.”
Marx said seafood companies also appreciate the program because it allows loans to remain dormant for up to five years without fees.
“I don’t know how many banks allow that,” he said.
Marx said 100 percent of the program’s allotted budget was used in previous years, but recently, as its budget has been raised into nine figures, about 70 percent of the allotted money has been used annually. The program’s largest single loan was for USD 44 million (EUR 38.8 million) in 2014, he said.
Companies interested in the program should contact the regional NOAA financial services branch with oversight over their geographic area. NOAA staff at the regional offices will help interested companies find out if they are qualified and assist them with filling out an application. The office with oversight over the southeast U.S. is located in St. Petersburg, Fla., the northeast branch is located in Gloucester, Mass., and the Seattle, Wash. office is the appropriate contact for west coast businesses.
More information on the program and the regional offices can be found at http://www.nmfs.noaa.gov/mb/financial_services/ffp.htm