Running your own commercial fishing operation may offer more freedom, but that freedom comes at a premium. That cost can make it particularly hard for those looking to enter the industry or update their fleet.

The Alaska Department of Commerce investments division held a public session in Wrangell on Sept. 16 to share information with potential borrowers and check in with current ones. The program offers low fixed-interest loans to commercial fishermen. On June 30, 2027, the legislation that fixed rates at 5.25% for the loans will expire, potentially increasing rates for new borrowers and also reducing the amount they can borrow.

“The program has helped a lot of younger fishermen get into the fishery,” said Yvonne Mink, a loan officer with the division.

The Commercial Fishing Revolving Loan Fund was created to promote a predominantly local fishing industry and to improve the quality of Alaska seafood products, according to the division’s website.

The revolving loan fund — which allows the program to lend more as borrowers pay back their loans — offers an array of loan options including vessel and gear purchase or refinancing, quality improvement of their catch and purchase of limited entry permit or commercial fishery quota shares.

In 2024, as a response to economic hardships in the fishing industry, the Alaska Legislature passed House Bill 273. The bill amended the revolving loan fund to give fishermen fixed low-interest rates for a 15-year term. It also increased the cap an individual could borrow from $200,000 to $400,000.

Before the legislation, the rate was set at the federal prime rate plus 2%, which would have totaled 9% as of last week. The 5.25% fixed rate, for example, on a $200,000 15-year loan would save a borrower more than $400 a month over a 9% loan.

Loans with lower interest rates help with the cost of vessel purchases or repairs, and banks will not provide loans for fishing permits.

“If they want to buy a limited entry permit, they have to come to us or (the Alaska Commercial Fishing and Agriculture Bank),” Fink said, “They can’t go to a bank for financing because banks can’t put liens on permits.”

As the low-interest provision for new loans expires, it is somewhat uncertain what the interest rate will change to starting next summer. Unless the Legislature steps in, it will revert back to the higher rate of prime plus 2%, with a cap at 10.5%.

Other loans managed by the division vary from 4% for a small business economic development loan to 8.75% for a commercial charter fisheries loan.

For the 50 commercial fishing loan borrowers in Wrangell, nothing will change on their current loans, and borrowers who get in before the end of June will lock in the current low rate.

Current borrowers experiencing hardship due to the short summer Dungeness crab season, rising operational costs or a vessel breakdown are able to work with loan officers to restructure their payments to alleviate the burden of the loan.

“We have tools that we can use to help restructure their loan, so they can use that money to get back on their feet,” Fink said.