Revolving Loan Funds
Buying quota is a major business expense for Cape Cod fishermen today—most will need to borrow money to get the fishing rights they need. In our business planning work with family fishermen here, we found that many were putting their homes on the line in order to get access to capital. That's because business loans are nearly impossible for small-boat fishermen to come by: Traditional lenders do not see fishing quota as collateral.
Knowing that small-boat fishing businesses can be profitable, even in today's challenging environment, we designed two loan programs that work for fishermen. Both are administered by the Community Development Partnership (CDP).
The Scallop Program: Scallop fishermen face especially high purchase prices for quota, but can also be rewarded with strong profits for the scallops they land. Scallop quota is a good investment for young fishermen on Cape Cod. In this program, fishermen can purchase up to $100,000 worth of quota with CDP financing that treats the quota as collateral—alleviating the need for fishermen to mortgage their homes to buy fishing rights. We require 20% down payments and the fishermen have quick payoffs—three years maximum—it's the way we keep the loans safe for the fishermen and for CDP.
The Groundfish Program: Started with funds from the National Marine Fisheries Service and direction from the Massachusetts Division of Marine Fisheries, this program provides lines of credit of up to $50,000 to qualified local fishermen. The funds can be used to lease groundfish quota or days-at-sea to target monkfish or skate.