Capital (Loans)

A loan is a sum of money you borrow from a bank or a credit union that is issued if your credit rating and/or current ability to repay the loan meets the lender's criteria. You pay the loan back, with interest, over a specified amount of time through monthly payments. The interest rate is usually determined by your credit score and varies from lender to lender.



Basic Capital Questions

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.

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.

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.

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).

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

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.

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.

Related Capital Resources