Help offered to commercial fishing industry

Posted: Thursday, October 26, 2000

Commercial fishers, processors and small businesses hurt by dismal Cook Inlet sockeye salmon returns may be eligible for low-interest loans under an economic injury disaster declared Tuesday.

More businesses than commercial salmon fishers may be eligible for the loans, said Rick Risner, supervisory loan officer for the U.S. Small Business Administra-tion, which made the disaster declaration at the request of Gov. Tony Knowles.

"It's also any business that relies on fishing income," he said. "The local video store -- if people don't have fishing income, maybe they can't rent those videos."

By 2:30 p.m. Wednesday, about a dozen business owners already had inquired about loans at SBA's new disaster office in Soldotna.

"We've had processors, wholesalers, commercial fishermen," Risner said. "It's getting into Main Street businesses. We had an auto repair shop who couldn't get paid because of lack of funds by fishermen."

Risner said Aida Alvarez, SBA administrator, declared the Cook Inlet region a disaster area because of the economic impact after floods in 1995 scoured sockeye salmon spawning grounds in the Kenai River, hurting this year's run.

Tuesday's declaration names the Kenai Peninsula Borough as the primary disaster area. It also names several contiguous areas where businesses could qualify for low-interest loans if they were injured by the Cook Inlet disaster. Those are the municipality of Anchorage, the Matanuska-Susitna Borough, the Lake and Peninsula Borough and the Chugach Regional Educational Attendance Area No. 10, which includes Whittier, Chenega Bay, Tatitlek and the rest of Prince William Sound, except the cities of Valdez and Cordova.

SBA offers loans at 4 percent interest with terms of up to 30 years. Risner said applicants must demonstrate the ability to repay them and must have collateral to receive a loan. For collateral, SBA's first choice is real estate. Fishing boats also may be used as collateral. However, limited-entry permits may not.

The collateral need not cover the loan, Risner said.

"If they own real estate, even if there's no equity in it, we'll use it," he said. "If they own a boat, even if there is not enough equity to cover the loan, we'll use it. The main thing we look at is whether they have enough cash flow to pay back the loan."

While most Kenai Peninsula Borough officials welcomed Knowles' request for an SBA declaration, many have expressed disappointment at the administration's refusal to declare a state disaster. Fishers and processors have expressed mixed feelings about low-interest federal loans.

Despite such reservations, Paul Dale, owner of Snug Harbor Seafoods, said he thinks SBA loans are part of the solution.

"You have to make ends meet. Staying solvent is important. Paying the bills is important," he said. "Longer term, I think everyone agrees there have to be structural changes in the industry. But SBA loans should help people meet their current obligations. I think everyone involved in Cook Inlet salmon lost money this year, fishers and processors. If anyone didn't, it was because they were involved in other areas besides Cook Inlet."

Dale said he picked up an SBA loan packet and is evaluating it.

Rep. Gail Phillips, who asked Knowles last summer to investigate the economic effects of the Cook Inlet salmon disaster, called the SBA declaration a good step. The loans should help a broad spectrum of businesses, she said.

For the long term, though, Alaskans must determine what is going wrong with fisheries, she said, "because so many of our fisheries were affected this year. The big picture needs to be looked at. It's easy to blame El Nino. It's easy to blame the factory trawlers. It's easy to blame one group vs. another. But that's just passing the buck."

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