The Small Business Administration announced changes to its Paycheck Protection Program on Thursday that allow fishing boat captains to use forgivable loans available through the U.S. CARES Act to pay their crew members. Deck hands had previously been able to apply for Paycheck Protection Program funds on their own, as independent contractors, but not that many did, according to Maine banks that helped process applications for the loans that are designed to keep people working during the COVID-19 pandemic. Boat captains could not apply for their crew or include their crew members’ salaries in the captain’s own forgivable loan application.

1. INCREASE FONT SIZEBUSINESS Posted Yesterday at 10:50 PM Updated at 5:50 AM
Fishing captains can get COVID-19
aid for sternmen, too
New federal rules now allow boat captains to use federal Paycheck
Protection Program funds to pay deckhands.
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BY PENELOPE OVERTON STAFF WRITER
The Small Business Administration announced changes to
its Paycheck Protection Program on Thursday that allow
fishing boat captains to use forgivable loans available
through the U.S. CARES Act to pay their crew members.
Deck hands had previously been able to apply for Paycheck
Protection Program funds on their own, as independent
contractors, but not that many did, according to Maine
banks that helped process applications for the loans that are
designed to keep people working during the COVID-19
pandemic. Boat captains could not apply for their crew or
include their crew members’ salaries in the captain’s own
forgivable loan application.
But on Thursday, the SBA announced a new rule that
would allow most Maine lobster boat captains to claim
crew, or what in Maine is called a sternman, in their own
PPP loan applications. To be eligible, the captain must have
paid the crew a share of the proceeds of the catch, employ
no more than 10 crew and have reported the salaries to the
IRS for tax purposes.
“The administrator has determined that the relationship of
a fishing boat owner and a crew member … is analogous to a
joint venture or partnership,” the agency concluded. “The
fishing boat owner and crew members each contribute
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2. labor or resources to a common commercial enterprise, and
the owner and crew members share in the enterprise’s
profits.”
With many restaurants shuttered, and typical export
pipelines closed, demand for lobster and other Maine
seafood has collapsed, leaving the state’s $674 million-a-
year commercial fishing industry scrambling for new
markets and short-term economic relief to survive the
pandemic.
Maine has received about $20 million of the $300 million
in federal COVID-19 relief funding set aside to help the
seafood industry. The Maine Department of Marine
Resources, which is in charge of administering Maine’s
share, has not yet decided how the money should be divided
up among the various fisheries and supply chain partners.
Many fishermen did not apply for the Paycheck Protection
Program before the first round of funding ran out, afraid
they might have to repay the loan if they misunderstood the
complicated federal guidelines, including the crew salary
issue. More applied in the second round, but exact numbers
aren’t known because the SBA has yet to release detailed
PPP records.
Many boat crew members found it easier to apply for
pandemic-assisted unemployment once the state opened it
up to the self-employed instead of applying for a forgivable
loan as an independent contractor, banking officials said.
But those who have yet to do either now have two days –
until June 30 – to take advantage of this last-minute
program expansion.
“Extending the program to fishermen impacted by the
pandemic will be a critical lifeline so they can continue to
provide Americans with the safest, most sustainable
seafood in the world,” said Leigh Habegger, executive
director of the Seafood Harvesters of America. “We urge all
eligible fishermen to take advantage of this program before
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3. Send questions/comments to the editors.
Fed cracks down on
big banks to guard
against risk posed by
pandemic
the deadline.”
Lobstermen are just starting to set their traps, and even in a
good year, start-of-the-season fishing is usually more about
laying claim to specific fishing turf than about the catch.
Most don’t land much until July, depending on weather and
when the lobsters shed their shells.
But Maine has a growing number of lobstermen – about
one in four – who harvest hard-shell lobsters offshore, year
round. Winter fishing is hard, but it can be profitable, with
March and April yielding the highest per-pound prices of
the year at $7.79 and $7.28, respectively, according to five-
year state data.
The virus has sent prices at the boat tumbling, with lobster
fetching as little as $2.60 a pound in some Maine ports this
spring.
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F I L E D U N D E R :
BUSINESS, COVID-19, COVID-19 PANDEMIC, FISHING
INDUSTRY, LOBSTER INDUSTRY
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