Below are common structures used by established U.S. companies with $15,000+ in monthly revenue. Explore how each works, typical use cases, and considerations.
SBA 7a Loan: Flexible, Long-Term Capital
The SBA 7a loan is a government-guaranteed program offered through banks and specialized lenders. It can finance working capital, equipment, business acquisition, and sometimes intangible assets such as permits or some quota-related rights (case-by-case and lender-specific).
- Typical uses: vessel purchase or refit, aquaculture expansion, processing equipment, refinancing business debt
- Repayment: often up to 10 years for working capital/equipment; up to 25 years if real estate is included
- Rates: usually variable and indexed to Prime; maximum spreads governed by SBA
- Down payment: commonly 10%–20% for acquisitions or startups; may vary
- Guarantees/collateral: personal guarantee usually required; business assets pledged; may include real estate
Learn how SBA loans generally work in this comprehensive guide: SBA loan. For faster, smaller SBA options, see the SBA Express loan.
Background reading: SBA loan basics and terminology at Investopedia.
Conventional Term Loan: Predictable Payments
A Term Loan provides a fixed amount with scheduled repayments and is often used for vessel upgrades, engines, or major gear. Strong revenue, time in business, and collateral support are typical eligibility factors.
- Best for: multi-year investments (repowers, processing machines, cold storage)
- Terms: often 1–5 years (sometimes longer for larger assets)
- Rates: fixed or variable; generally lower than short-term options
- Collateral: vessel/equipment or blanket lien (UCC-1); personal guarantee common
To compare pros, cons, and underwriting norms, see the in-depth explainer on the term loan for small business.
Equipment Financing: Engines, Winches, Refrigeration, and More
Equipment Financing uses the asset itself as collateral. It’s often used to fund repowers, onboard refrigeration, hydraulics, electronics, forklifts, ice machines, and aquaculture systems.
- Best for: asset-backed purchases with clear serial numbers and valuations
- LTV: may cover a high percentage of equipment cost depending on age and condition
- Rates/terms: typically competitive; terms aligned with asset life
- Closing speed: often faster than SBA or conventional term loans
For details on rates, structures, and leasing vs. loans, read the equipment financing guide.
Business Line of Credit: Manage Seasonality and Fuel Spikes
A Business Line of Credit provides revolving access to capital up to a set limit. Draw funds as needed for bait, ice, fuel, and repairs, then repay when receipts come in from buyers or charter bookings.
- Best for: seasonal working capital, emergency repairs, bulk supply buys
- Structure: interest typically accrues on drawn balances only
- Docs: bank statements, financials, AR reports may be required
Explore use cases in this article: business line of credit.
Short-Term Business Loan: Speed Over Duration
A Short-Term Online Loan trades a higher cost for faster access and simplified documentation. Many established fishing companies use it to prepare for the season or seize discounted gear opportunities.
- Best for: time-sensitive purchases, quick cash flow gaps
- Terms: commonly 6–24 months
- Payments: often weekly or monthly, sometimes daily for certain products
Tip: Compare total cost of capital, not just the rate. Condensed terms mean cash flow impact is concentrated.
Invoice Factoring: Turn Fish Sales into Immediate Cash
When selling to distributors, processors, or large retailers on net-15 to net-45 terms, invoice factoring can convert receivables into working capital within days.
- Best for: B2B seafood sales with predictable invoicing
- Advance rate: often 70%–90% of invoice value, with a reserve released at collection
- Considerations: customer creditworthiness matters; factor may file a UCC-1
Revenue-Based Financing (RBF): Pay from Sales
Revenue-Based Financing links payments to a percentage of your sales until a set amount is repaid. For operations with variable daily revenue (e.g., retail bait/tackle or charter bookings), the flexibility can be useful.
- Best for: established companies with consistent monthly gross revenue
- Pros: payments naturally adjust with seasonality
- Cons: higher total repayment than traditional loans; short durations
Merchant Cash Advance (MCA): High-Speed, High-Cost Capital
An merchant cash advance isn’t a loan; it’s an advance repaid from card sales or daily/weekly transfers. It’s often the fastest to close but usually the most expensive.
- Best for: urgent, short-term needs when other options aren’t feasible
- Payments: variable or fixed daily/weekly debits
- Considerations: watch for stacking multiple advances; it compounds cash flow stress
