A fishing loan provides funds necessary to acquire fishing equipment such as nets, cages and baskets, hooks and other fishing equipment. This loan is a long-term loan as the equipment being purchased with the fishing loan will lose value and depreciate over time. This depreciation allows the fishing company the opportunity to write off the loan cost over the length of the loan’s terms.
Depreciating a Fishing Loan
The period of time in which the fishing equipment is in use by the fishing company is its useable life. Fishing equipment can be expensive, particularly for a small fishing company. A fishing business would use a depreciation schedule over the useable life of the fishing equipment to recover its interest costs associated with the purchase or financing of the fishing equipment. The depreciation allows the fishing business to write down the loan’s costs as an expense item and take a tax deduction.
Fishing Loan Interest Rates
The rate of interest that a fishing loan borrower pays will be based on their credit worthiness. This interest rate will be stated in the loan agreement, which is executed between the borrower and the lender. Good credit risk with high credit scores will benefit from better interest rates than those borrowers with low or poor credit risks. A borrower that wishes to take out a fishing loan should understand its credit rating and be prepared to securitize the loan with collateral if necessary.
Some important items to know to finance your are:
- How much money do you really need?
- Do you know your exact FICO scores?
- How do you plan to repay the loan?
- Who is going to borrow the money? You personally or another legal entity?
- What assets can you pledge to secure your loan?
Make sure you know you are pre-qualified before you apply. Our free business capital search engine will allow you to see the funding programs and lenders that are available to you and then you choose those you wish to apply for.