Low-interest loans not generating much interest

Posted: Friday, November 24, 2000

KENAI (AP) -- Commercial fishermen and businesses have filed just 27 applications for low-interest loans to compensate for a weak sockeye salmon run in the upper Cook Inlet.

Gov. Tony Knowles asked the federal Small Business Administration to make low-interest loans available after his administration declined to issue a state disaster declaration following the weak sockeye run.

SBA declared an economic injury disaster for the Cook Inlet area on Oct. 24, making the loans available. The loans come with a 4 percent interest rate, terms of up to 30 years and a maximum principal of $1.5 million.

The loans have attracted few takers given the 1,330 limited-entry salmon permits issued for upper Cook Inlet, including 745 setnet permits and 585 driftnet permits.

By the middle of last week, SBA had interviewed 127 people about loan applications, said Karl Whittington, the agency's public affairs officer in Sacramento, Calif. Of the 27 completed applications, SBA had processed just one and that was withdrawn.

Rob Williams, president of the Kenai Peninsula Fishermen's Association, said he thinks many fishermen are hesitant to take on additional debt following the poor seasons of the last few years.

Biologists expect a strong run of Cook Inlet sockeyes next year, he said.

Ed Oberts, assistant to Borough Mayor Dale Bagley, said he also believes many fishermen are reluctant to take on additional debts.

''Even at 4 percent (interest), it could be a hole they couldn't get out of,'' he said. ''I think a lot of people are trying to find ways to get through this winter.''


Loan applications are available by writing SBA at P.O. Box 13795, Sacramento, CA 95853-4795 or by calling (800) 488-5323 or (916) 566-7388 for the hearing-impaired. The application deadline is July 24.

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