SEAFOOD.COM NEWS [Seafoodnews.com] By Jack MacAndrew — August 14, 2013 — Charlottetown PEI, The government of Prince Edward Island has opened the vault to lobster fishermen in financial trouble because of low prices for their catch during the spring season.
"We are re-opening and expanding the Fishers Low-interest Loan Program because we know there are fishers who have good prospects for long – term sustainability in this province, provided they are able to get some help with their current financial challenges , " said Innovation and Advanced learning Minister Allen Roach, in making the announcement.
Fishermen in LFAs 24 , 25 and 26A are eligible for the financial help . After the PEI Lending Agency has conducted due diligence , a bona fide lobster fishermen in LFAs 25 and 26A will be eligible to borrow up to $CDN200,000, while a fisherman in LFA 24 may borrow up to $CDN300,000.
Participating fishermen must agree to give the province "… a first security interest over all fishing related assets and power of attorney over all fishing licenses".
A four per cent interest rate will be charged on the loans over the next six years , but may be renewed at the expiration of the first term of the loan.
" This really helps , especially the young fishers , " commented Mike McGeoghegan , President of the PEI Fishermen's Association.
Mr.McGeoghegan says some fishermen may need their current payments to be forgiven because they do not have the money to pay them.
The newly renovated program will be offered to fishermen currently not in debt to the provincial lending agency , and to the 260 fishermen who are paying on outstanding loans.
However , Minister Roach warns there will be no blanket forgiveness on loans currently in default.
" If they meet the requirements , everything is on the table , " he said."We're not here to try to put any fisherman out of business".
The PEI Lending Agency has issued a list of guidelines which must apply to fishermen seeking a new loan. They must hold a valid lobster fishing license from the department of Fisheries and Oceans ; and they must have a net cash position of "… less than $CDN40,000 per annum…".
A fisherman's debt must be directly attributable to fishing activity , and any loans made under the program "… cannot be used for capital acquisition , or to acquire licenses."
This story originally appeared on Seafood.com, a subscription site. It has been reprinted with permission.