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Shellfish aquaculture operators have historically had difficulty obtaining
capital because their needs do not fit the business loan policies of banks and
other lenders. To help alleviate this, the Shellfish Aquaculture Working Capital
Fund (AWCF) provides loans to commercial aquaculture businesses. These loans
provide capital that supplements funds available from banks and other government
and non-government sources.
Applicants must
- Operate a commercially licensed blue mussel or scallop shellfish farm or
have a historic attachment to the primary processing of mussels;
- Show that the project for which an AWCF Loan is required must increase both
the commercial viability of the operation and its employment opportunities;
- Show that the project could not proceed without an AWCF loan and that the
total financing includes funds to be advanced by other sources. In other
words, the AWCF is not intended to be the sole source of working capital for
an operation.
Eligible Applicants
- Must be established private sector businesses growing blue
mussels or scallops and/or processing blue mussels in commercial volumes;
- Aquaculture farming businesses must have valid commercial aquaculture
licenses with sufficient water available to produce, or with the capacity to
produce commercial volumes of shellfish;
- Commercial volumes are usually considered to be a minimum
of
- 300,000 lbs of
blue mussels per year (generally at least 40 hectares) or
- Capacity
of one million scallop spat (generally at least 15 hectares);
- Blue mussel processing businesses must have a valid primary processing
license and demonstrate their historic attachment to processing mussels, with
a minimum throughput of 100,000 pounds up to April 1, 1999;
- Must comply with the provincial Aquaculture Act and/or
Fish Inspection Act and their Regulations and, where applicable, the Canadian
Environmental Assessment Act;
- Will usually be required to make a personal cash
investment of at least ten percent of total eligible project costs;
- Must maintain a minimum of 20% equity in the business
after applying the proposed AWCF project to the owners' existing equity
position in the business;
- Must provide current and complete financial statements are
required to document the owners' existing equity positions.
Eligible Project Costs
Eligible costs include new capital assets and working capital expenses linked directly to a shellfish farm expansion such as:
- Labour costs of owner-operators;
- Seed purchases;
- Farm site development expenditures;
- Direct costs for inventory expansion;
- Business-specific marketing and promotion
costs;
- Production and operation efficiency costs..
Ineligible Project Costs
Costs not covered under the
program include:
- Expenses incurred prior to the submission of AWCF
application;
- Land and goodwill costs;
- Expenditures for motorized vehicles or vessels not used; exclusively for
projects being considered under the Fund;
- Assets
purchased from associated or affiliated
companies;
- Costs associated with restructuring of existing
debts;
- Secondary processing costs;
- Share purchases of the
company;
Available Funding
- The total eligible costs for an AWCF project
are usually expected to be less than $250,000;
- Loans are fully repayable and security may
also be required;
- Loans carry competitive interest rates and
repayment schedules are tied to projected business cash flows;
- Normally, there will be an interest-free
period and no principal repayments during the grow out cycle of the species.
To Find Out More
For information and assistance,
contact the INTRD office nearest you.
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