BRUNSWICK, MAINE – June 4, 2019 – Coastal Enterprises (CEI) has created a new loan product to help finance shellfish and sea vegetable growers who, for a variety of reasons, may not be able to access loans from traditional lending sources.
The Sea Farm Loan is designed specifically for marine aquaculturists who have secured a lease site and have, at minimum, produced their first “crop” with a documented sale. Available exclusively for Maine businesses, eligible applicants can borrow up to $150,000. Loans can be used for working capital, gear, vessel and equipment purchases, renovations and/or infrastructure construction.
Additional factors that CEI considers for Sea Farm Loan approvals include a completed business plan and a minimum of two-years cash flow projections, with reasonable collateral and a personal guarantee. Borrowers are expected to provide evidence that they were declined financing at another institution to be considered.
“We believe there is a gap in available financing for aquaculture businesses looking to expand,” said CEI’s Nick Branchina, Associate Director of Fisheries & Aquaculture, who provides technical assistance to aquaculture operations. “Shellfish and sea vegetable farming often has too much risk and too little collateral for most commercial lenders. In truth, many if not most of Maine’s aquaculture farms are still very much in their relative infancy and there is little to no benchmarking available to lenders to evaluate future profitability. The Sea Farm Loan is designed to address this gap and provide needed capital to entrepreneurs committed to responsible production and looking to scale up their businesses. CEI is committed to our local seafood economy in Maine and is willing to shoulder some of the risk where others may not.”
One of the challenges presented to growers – and subsequently lenders – is the harvest seasonality and the consequent revenue stream. Sea vegetables – namely kelp – are a winter crop with a spring harvest only, and income is earned only upon point of sale during that time period. CEI is sensitive to these realities and the Sea Farm Loan incorporates flexible repayment options structured to meet a borrower’s needs.
CEI hopes to provide competitive financing, but ultimately hopes that successful businesses mature to a point where traditional lenders will consider financing them. “Not all businesses need or are ready to access capital to expand,” said Branchina. “But we do recognize that a product like this may fill a void for serious farmers and be the catalyst to lift their businesses into sustainable, primary-income operations that can carry employees or family members on a full-time basis.”
CEI’s Sea Farm Loan is available to qualifying aquaculturists. Other financing for commercial fishing operations is also available. Contact Nick Branchina at CEI for more information about these programs at Nick.Branchina@ceimaine.org.
Coastal Enterprises, Inc. (CEI) helps to grow good jobs, environmentally sustainable enterprises and shared prosperity in Maine and in rural regions across the country by integrating financing, business and industry expertise, and policy solutions. CEI envisions a world in which communities are economically and environmentally healthy, enabling all people, especially those with low incomes, to reach their full potential. More at www.ceimaine.org