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Shellfish Aquaculture Working Capital
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 IBRD office nearest you.
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