Complete Guide to Commercial Fishing Loans and Financing

Commercial fishing in the U.S. is a multi-billion dollar industry, and your business contributes to that success. But the fishing business is competitive, and a lack of funds can affect your ability to stay ahead. After all, keeping your company growing and afloat during slow seasons requires capital. Let’s look at reasons you might turn to a lender and some top financing options for your business.

Financing Your Commercial Fishing Business for Success

Here are just a few examples of times when the right commercial fishing loan could meet the needs of your fishing and boating business.

Update Your Fishing Boat

Is the latest seacraft calling your name? If so, financing can help you fund the purchase or lease of the type of boat your business needs, whether it’s a 35-foot commercial fishing catamaran or a 130-foot crabbing vessel.

Upgrade Machinery and Equipment

Commercial fishing is one of the most dangerous jobs in the U.S.; don’t let a machine malfunction put you at greater risk. Whether you need to repair or replace an expensive engine or motor, get the financing you need to operate. Invest in your fishing company and buy the parts your boat needs to run.

Expand Your Business

Maybe business is booming and you’re considering bringing on additional staff, relocating your headquarters or expanding your operations to another area. A commercial fishing loan could offer the amount of financing you need to ramp up your efforts.

Get a Boost in Working Capital

Working capital is money you need for everyday expenses, and it can be tough to come by in your cyclical business. If you’re waiting for invoices to be paid or didn’t bring in the catch you’d anticipated, get short-term funding to bridge the gap. Use a working capital loan to:

• Manage boat maintenance expenses
• Cover lease costs
• Pay utility bills
• Stock up on supplies
• Pay workers
• Fund emergency expenses

Best Loans and Financing for Commercial Fishing Businesses

With so many financing options out there, it can be difficult to know which way to turn. Here are a few options to consider when you’re looking for commercial boat loans or fisherman financing.

SBA Loans

The U.S. Small Business Administration (SBA) is a federal government agency that partners with lenders throughout the country to offer competitive loans to small businesses, including commercial fishing businesses.

SBA partner lenders are able to offer favorable loan terms because the SBA guarantees a portion of each loan, up to 85% in some cases. In fact, SBA loans are known for their low interest rates and extended repayment terms, which can be between 5 and 25 years, depending on the use of the loan. Funding amounts can even extend into the millions for some loans.

SBA loans include SBA Express, SBA 504, and SBA 7(a) loans, to name a few. It’s important to note that borrowers seeking SBA 7(a) funds for the building or reconditioning of fishing vessels with a 5-ton or more cargo capacity must first request funding from the U.S. Commerce Department’s National Marine Fisheries Service.

Equipment Financing

Leverage equipment financing to acquire essential machinery and tools, whether you need an expensive fish finder or costly GPS navigator. You can also use equipment financing to purchase or lease a boat. Many lenders offer equipment financing interest rates starting in the single digits. Shop around to find commercial boat loan rates that work for you, and use a commercial boat loan calculator to get an idea of what your financing will cost.

Keep in mind, with an equipment loan, the machinery you purchase serves as collateral for your loan. This means if you default on your loan, your lender can recoup their losses by seizing the equipment you acquired with your financing.

Lines of Credit

A business line of credit is a flexible funding solution that’s there when you need it. How does it work? A lender approves you for a certain credit limit, let’s say $20,000, over a certain term. You don’t have to use those funds right away. Instead, you can keep it tucked away until you need it.

If an emergency repair or other unexpected expense comes up, use your credit line to pay for the fix. You’ll only pay interest on the amount you borrow. Plus, as you pay down your debt, your credit line is replenished, up to your original credit line amount.

Business Term Loans

Business term loans are another option if you’re seeking financing. With a term loan, a lender will approve you for one lump sum of money, which can range from a few thousand dollars to several hundred thousand, depending on factors such as your revenue, existing debt and credit score.

Term loans can have repayment periods ranging from less than 18 months to 5+ years for longer-term term loans, depending on your lender. You’ll repay your loan with either daily, weekly or monthly installments, depending on your lender’s terms. Keep in mind, shorter-term loans generally have less stringent credit score requirements, but higher interest rates and more frequent repayment installments than longer-term loans.

Merchant Cash Advances

If your credit has seen better days, a merchant cash advance could provide a temporary solution to your funding needs. A merchant cash advance is a type of short-term financing many businesses qualify for. With this type of financing, a lender advances funds to you based on your business’s future sales. You’ll typically pay back your financing in daily installments until repayment is complete. Though this type of financing can be costly, it offers a quick, hassle-free solution when you need money fast.

Where to Find Commercial Fishing and Boat Financing

When you’re thinking of applying for a commercial fishing loan, you might think of conventional banks first. Several states even have banks that specialize in lending to commercial fishing and agricultural businesses. But banks aren’t the sole source for your financing needs, and there are pros and cons involved in applying for a conventional loan.

Banks are known to offer competitive interest rates and terms, though their processing and funding times can also be lengthy. Requirements to qualify can also be stringent and paperwork requirements can stack up (e.g., tax returns, profit-and-loss statements, a business plan).

Alternative non-bank lenders are another option. They’re known for speed, convenience and ease of funding. They often work with borrowers with fair-to-poor credit and have minimal application requirements. Because they’re open to taking on riskier loans, they typically have shorter repayment windows, more frequent payment installments and higher interest rates.

• State-Sponsored Funding

  In addition to banks and alternative lenders, you may be able to find state-sponsored loans specifically geared toward commercial fishing businesses. Alaska, for instance, offers a Commercial Fishing Loan Program through its Division of Economic Development. The program touts fixed low-interest rates and repayment terms up to 15 years. Check your own state’s government website to see if a similar option is available to you.

What You Need to Apply for Commercial Fishing Financing

While different lenders have varying requirements, at Fast Capital 360, we can offer funding to business owners who meet the following criteria:

• Time in Business 4 months
• FICO Score 500 +
• Annual Revenue $100,000

To get started, you’ll need to provide:

• Basic details about yourself and your company
• 4 most recent monthly bank statements

Apply with Fast Capital 360

The waters of business financing can seem pretty choppy, but with Fast Capital 360, they don’t have to be. Whether you run one commercial fishing boat or a fleet of ships, there’s always more to be done, another season to prepare for and more fishing equipment to purchase. Get a commercial fishing business loan that works for you and take advantage of the benefits we offer.

Save Time

Complete our 2-minute online application to see if you qualify for a commercial fishing business loan.

Receive Multiple Financing Offers

Compare several offers from our nationwide network of lenders. Choose the best fisherman financing or commercial boat loan for your business.

Get Expert Advice

Our knowledgeable advisors are here to answer your questions and walk you through the funding process.