Working Capital Fund

This program is designed to provide access to working capital for new entrants in the development phase of shellfish farming and for existing shellfish producers in the expansion of their farming operations.

The Shellfish Aquaculture Working Capital Fund Program is a joint initiative of the British Columbia Ministry of Agriculture, Food and Fisheries working in partnership with Farm Credit Canada and the BC Shellfish Growers Association.
If you are interested in learning more about the Shellfish Aquaculture Working Capital Fund please follow the links below for a more thorough look at the program and how it can help you and your shellfish farm.

THE PROGRAM
Farm Credit Canada Loan Administration
Farm Credit Canada (FCC) is the delivery agent for the Shellfish Aquaculture Working Capital Fund Program. All loan applications, approvals and management will be through the Duncan, BC Farm Credit Canadaoffice.

Applicant Eligibility
Applicant�s must:

  1. be Canadian citizens or have landed immigrant status, and be 18 years of age or older
  2. have all required license and tenure approvals in place
  3. have a business plan, in a defined format, which indicates the commercial viability of the business, the need for financing and sources of funding, and
  4. Applicant can be:
    • An individual
    • Sole proprietorships
    • Partnership
    • BC registered company
    • Cooperative

Project Eligibility
Applicants can apply for loan funding to assist with the following:

  • grow out systems, i.e. rafts, floats, lines, trays, netting – systems must meet the industry Code of Practice;
  • equipment
  • seed purchase for: oyster, clam and/or mussels

The program will not provide funding for vehicles or construction of float houses

Maximum and Minimum Loan Values
The Shellfish Aquaculture Working Capital Fund is not intended to be the sole source of project financing.

Maximum loan will be $30,000 or 65% of total project costs per individual business, and minimum loan will be $7,500.

Over the term of the program the maximum outstanding loan principal per individual business is $30,000. Businesses may apply more than once.

Loan Terms and Interest Rates

  • Loan terms and interest rates will parallel the standard lending criteria of Farm Credit Canada
  • Loans will be repayable over a 5 to 7 year term
  • Loans for seed purchase only will be fully repayable within 3 years, or upon sale of product
  • Loan principal payments may be deferred for initial 2 years of a loan. Interest payments must be made.

Loan Security Requirements
Loans will be fully secured, as per normal credit lending policy. Security may take the form of a charge(s) on:

  • Tenure
  • License of occupation
  • Personal property
  • Equipment
  • Leasehold interests
  • Land and buildings
  • Inventory

In the case of loan default, security will be acted on as per normal credit lending practice.

Loan Application and Administration Fees
Applicants will be responsible for all loan application and administration fees charged by Farm Credit Canada.

Loan Application Information
Please contact:
Farm Credit Canada Tel: (250) 715-2304
301 – 2700 Beverly Street Toll Free: 1-800-387-3232
Duncan, BC V9L 5C7 Fax: 1-250-715-2305
Email

When applying you must submit:

  • a complete and
  • comprehensive business plan
  • copies of the appropriate licenses and lease

Visit the Farm Credit Canada website by following these links:
Shellfish Aquaculture Working Capital Fund Information (In English):
http://www.fcc-fac.ca/engllish/our_company/partnerships/shellfish.shtml
Programme de fonds e roulement pour l’industrie du mollusque (En Francais):
http://www.fcc-fac.ca/francais/notre_societe/partenariats/mollusque.shtml

QUESTIONS & ANSWERS ON THE WCP (WORKING CAPITAL FUND)
Why was the program developed?
Aquaculture producers have historically had difficulty obtaining capital and operating credit because their needs do not always fit the standard business loan policies of banks and other lenders, nor does the industry does have a long “track” record that would provide the commercial credit industry with a comfort level in standard risk assessment.

How was the program developed?
An advisory group, including the Province of BC, Fisheries Renewal BC and the BC Shellfish Growers Association, reviewed and provided recommendations on program policy and guidelines. The advisory group remains in place over the term of the program and will continue to provide recommendations on policy and guidelines.

Where is the funding coming from?
The funding needed to get the program started came from the Province through BC Fisheries and Fisheries Renewal BC. It is hoped that a matching contribution from the federal government can be negotiated.

How does the program work?
There are three basic concepts around which the program will work:

  1. A revolving loan fund that is essentially cost neutral.
  2. Program delivery (loan administration) is by a third-party agent.
  3. Loans are assessed and issued on the basis of sound business plans and are subject to standard lending criteria and loan interest rates.

What is the role of the BC Shellfish Growers?
The BC Shellfish Growers Association is the central organization that represents the interests of the industry. As part of the advisory group they provide information on production and business issues critical to the development of shellfish farming. The Association, within very well defined terms and conditions, will act in the role of fund managers.

The BCSGA does NOT review loan applications, nor will the BCSGA at any time have access to loan information.

What does the BCSGA get out of their participation in the program?
The Association is paid an annual administration fee and assurance that the industry interests and issues for the long-term business development of the sector are brought to the advisory group for consideration.

Why is Farm Credit Canada doing the loan reviews and administration?
Farm Credit Canada (FCC) currently provides lending services to the agriculture industry � aquaculture is a farm enterprise and falls within their mandate. In addition, expertise is in place to assess and manage loans based with an understanding of the business context of shellfish farming.

For new entrants, working with FCC through a standard commercial credit review process, goes a long way towards establishing a track record and basis for meeting future credit needs.

Do I have to be a member of the BCSGA to apply for a loan under the Program?
No � the program is open to any applicant who meets the program criteria.

Will I get a break on interest rates?
No � standard rates will be generally applied under the program. The objective of the program is to provide access to working capital not to subsidize interest rates.

What do I have to do to apply for a loan?
Applying for a loan under this program is just like applying for any other type of business loan � you must have a sound business plan in place that demonstrates the viability of the operation and ability to repay the loan.

Farm Credit Canada is the contact for loan applications, the main FCC office for aquaculture lending in BC is located in Duncan. They can be contacted directly at: (250) 715-2304 or through their Web Site.

Will I be required to pay any loan fees?
Yes, a standard application fee charged by FCC will apply.

Is the loan only for new entrants into the industry?
No � if you want to expand your operation or to borrow funds for seed purchases you may apply.

What type of security will be required for these loans?
Security will be taken as per normal lending operations. FCC will assess security requirements based on the individual applicant, the type of loan and what is available for security.

If a loan goes into default what happens?
Standard lending practice will apply, however, this would occur only after the lender has worked with the shellfish operation to try and resolve any issues.

Who makes the final decision on whether or not a loan is granted?
All decisions with respect to loan approvals are made by FCC and are based on standard credit practices.

If I apply for a loan will anyone from the BCSGA or the Province have access to my application and business information?
No � all information is retained by Farm Credit Canada. Information will be provided on an aggregate basis (i.e. number of loans issued, average value of loans, type of loan etc.) for program monitoring and evaluation.