Capital (Loans)

Basic Capital Questions

Should I go to a private bank or a credit union?

There is no best type of lender because it all depends on what you need, whether they will give you a loan or not, and terms. The best place to start is who you already use for your personal banking needs. This is a significant long-term decision, so be sure to shop around.

What types of loans are there?

There are personal loans and business loans. With a personal loan, your personal financial information will be reviewed, including your income and your credit history. Personal loans are usually unsecured meaning you do not have to put up collateral to get the loan. However, if your business does not pay back the loan you are now personally liable for the outstanding loan balance. Business loans will most likely require you to submit paperwork about your business, including financial statements and financial projections. They can be both secured and unsecured and will likely still depend on your personal credit history.

What should I use a loan for?

You are most likely to be approved if for loans for purchases such as a vessel, gear, vehicle, or shoreside infrastructure. Loan to pay wages are less likely to be approved.

What makes an agreeable loan?

Given that aquaculture is not mainstream with most lenders, just being approved is a win. Pay close attention to the terms such as interest rate, length, and loan fees (processing costs).

What type of information do I need to apply for a loan?

Financial and production records, income statements, and a business plan.

How can I increase my chances of securing a loan?

Sound business planning, detailed financial records, and detailed production records. Loans are approved because lenders are confident that your business is healthy enough to make payments on time. Your business plan, financial records, and production records are how you demonstrate the ability to repay.

If I am denied a loan at a bank or credit union where should I go?

Coastal Enterprises Incorporated has a few loan programs for sea farms that are denied a loan elsewhere; that have become a go-to financing resource for many Maine aquaculture companies.