Maine lobstermen reeled in more small federal emergency loans under the Paycheck Protection Program than members of any other industry in Maine, with about one out of every three commercial lobstermen landing one, but the average loan was barely large enough to cover a month’s worth of bait at the height of the summer fishing season.

About $14.9 million in forgivable Paycheck Protection Program, or PPP, loans of less than $150,000 have been handed out to 1,358 Maine lobstermen, according to an analysis of newly released U.S. Small Business Administration data. That puts lobstermen ahead of full-service restaurants, real estate offices, beauty salons and home builders, which rounded out the top five Maine industries receiving small PPP loans.

But the high participation rate didn’t net Maine lobstermen a lot of money, with the average small PPP loan to lobster fishermen working out to be just $10,900 each, data show. By comparison, full-service restaurants got $53,500. Home builders, $30,000. It didn’t get better when the loans got bigger: Only two lobstering companies got large loans of more than $150,000.

“A lot of people got very small loans that helped in the short term, at the start of the crisis, but now the crisis is dragging on and lobstering season hasn’t even really started,” said Ben Martens, executive director of the Maine Coast Fishermen’s Association. “Ten grand is nice if you’re struggling, but not enough if you’re suffering.”

Maine’s $1.4 billion-a-year lobster industry – including those who buy, sell and process lobster as well as catch it – have received 1,495 forgivable PPP loans worth at least $24.2 million, so far. Fishermen got the lion’s share of the industry’s total PPP money, but only because they outnumber dealers, retailers and processors. Some dealers got loans of up to $1 million.

Maine Coast held online training sessions for fishermen this spring to discuss the different kinds of aid available through the federal CARES Act, and recruited loan officers, accountants and business specialists to help them apply for relief. Hundreds of Maine fishermen have talked to Martens about the pandemic’s impact on their business, and how they are using the bailout money.

His takeaway? The amount of pandemic relief coming from the CARES Act is not enough to save Maine’s lobster industry if there is little demand for lobster. At this point, however, it’s still too early to say what the summer will bring. The peak lobstering season is only just getting started. No one knows how many will fish, how big the catch will be or what price it will fetch.

Right now, with much of the state’s 4,300 lobster boats just starting to set traps, wholesale prices are down 40 percent from this time last year, said Urner Barry, a national seafood consulting firm that tracks lobster prices. Lobster is a luxury food outside of Maine, usually sold in fine-dining establishments, casinos or cruise ships. Many of those have only just begun to reopen.

Lobstermen used PPP loans to get them to the start of the fishing season but worry it won’t be enough to survive a COVID-19 summer.

“We’re an industry that wasn’t expecting much of a handout,” said David Horner, a Southwest Harbor lobsterman who heads up the local lobster zone council. “It’s a good thing, too, because we didn’t get one. People have got no idea how much it costs to fish. Something’s better than nothing, but the program doesn’t really work for an industry like ours.”

It was Horner’s accountant who recommended he apply for a PPP loan. He hadn’t heard of it, but told his accountant to do what he thought best. He received about $21,000, or eight weeks’ worth of last year’s wages that, as sole proprietor, he essentially paid himself. He used that, plus an established credit line, to get by for now, until the start of peak fishing season.

Horner said it was too early to tell what kind of a season he’ll have. Last week, he was getting about $3.50 a pound, which is less than what he got last year in July, but about the same as he got in July 2018. He could live with that price, but he does not know what will happen when the whole fleet starts to fish and the available supply of lobster surges.

But Horner, a veteran lobsterman, is luckier than most. He doesn’t have a boat payment. He has money socked away in individual retirement accounts he could tap to pay his household bills if it gets too expensive to fish and he needs to sit this fishing season out. But he worries that many of Maine’s younger lobstermen will not be able to survive if the price collapses.

Some bankers share Horner’s concerns for the up-and-coming generation of lobster fishermen.

“If you’ve already paid for your boat, you can afford to sit it out for a while,” said Scott Peasley, a loan officer at Machias Savings Bank, which administered more lobster-related PPP loans than any other lending institution in Maine. “But for those young guys who invested in a big boat five or six years ago when the hauls were huge, ten grand and change won’t last 10 minutes.”

Veteran lobstermen might not have needed it, but many took it as backup, said Kristan Porter, a Cutler lobsterman.

“Guys figured if things really go to crap, I can at least pay my crew,” said Porter, president of the Maine Lobstermen Association.

While the average individual loan might have been relatively small, taken as a whole, the PPP money flowing to lobstermen has a significant ripple effect on the fishing communities that dot Maine’s 3,400 mile coastline, according to Peasley and Martens. The lobstermen’s share of PPP has pumped $3 million into Deer Isle-Stonington, Jonesport and Vinalhaven.

While the PPP participation rate was high, many lobstermen lamented the lack of clear program guidelines. Some got rejected at the start because they were sole proprietors, and the application date for that group was later. Others balked when they were told different things about how they could use the forgivable loan so they wouldn’t have to repay it.

The sternmen and deckhands who work on the boat but do not own the business were initially left out of the PPP program, forced to apply on their own as independent contractors instead of being paid from the captain’s loan. That eventually changed, but only after most of the PPP money was spent. Most sternmen ended up on unemployment, according to banks that processed the loans.

Jim Buxton, a Scarborough lobsterman who fishes out of Merrill’s Wharf in Portland, said his sister, a bookkeeper in New York, talked him into applying for the PPP loan. After two tries, his application was approved, but it was only for $2,500. Worse yet, he has yet to actually receive the money. He found out he has to set up a special bank account to get it.

“It would be nice, but if $2,500 is going to make or break me, I’ve got bigger problems, you know?” Buxton said. “The program is set up for people with a full-time accountant. When your full-time job is paperwork, a little more is no big deal. But I’m a guy who just wants to work on his boat and dive and weld.”

That’s because Buxton is not a full-time lobsterman. In the summer, he fishes hard five or six days a week, but he also welds and has a side  business installing commercial moorings for boats. He still maintains an urchin diving license, too, but he will only go back to that if times get really tough. He has to remain diversified so he doesn’t have to fish.

It’s one of the reasons he has resisted the urge to buy a new boat. He still fishes out of the Nomad, which he bought for $45,000. That enables him to make a living even if the catch is low, and he lands only 30,000 pounds in a year, or the price is soft, fetching as little as $3.50 a pound. If things get bad, he’ll simply stop.

Even then, he’d have to endure two more weeks of losing money just to retrieve his traps from the ocean bottom.

“I know my shutdown point,” Buxton said. “If I can work and cover all my variable costs, like bait and fuel and help, and some of my fixed costs, like insurance and wharf fees, then I go. Most fishermen, they want to go no matter what, but as a businessman, I have to know what my break-even point is, based on the price I’m getting and the size of the catch.”

Genevieve McDonald, a Stonington lobsterwoman who is also a first-term state lawmaker, helped a lot of her colleagues get PPP loans. She is happy to see that so many lobstermen participated in the program, especially in her home district. She looked into it for her own business, too, but decided it didn’t work for her. She wanted a way to pay business expenses, if necessary.

The PPP was designed to protect the paychecks, or jobs, of those working for the business, which in McDonald’s case would have meant herself. She could have set up a separate bank account and paid herself, then taken it out and used it to pay down her boat loan or some other business expense, but that seemed overly complicated. Any mistake could lead to forced repayment.

McDonald took out an SBA Economic Injury Disaster Loan, or EIDL, instead. She declined to disclose the amount, which would essentially tell the lobstering world how much money she earned last year, but she said it was more than enough to cover a year’s worth of business costs, including boat payments.

Unlike the PPP, only $1,000 of the EIDL is forgivable, but the interest rate on the rest of the loan is just 3.75 percent, deferred for a year and repayable over 30 years. The EIDL has far fewer restrictions on how she can spend the money she will repay, she said. While data on who received one in Maine is unavailable, McDonald believes many lobstermen chose the EIDL over the PPP.

“For a lot of us, it’s a safety net,” McDonald said. “We tucked it away in the bank and hope we never have to touch it. After (COVID-19) is over, and the market has recovered, I’ll give it back. For me, the interest was a small price to pay for peace of mind. For me, the loan is more like insurance that means I can outlast the bad times.”

But the federal pandemic relief has not made the lobster industry whole, McDonald said. The PPP essentially covered eight weeks of wages, and most of that money has already been spent. Unless the market recovers as quickly as the supply of lobster comes on in the coming weeks, the state lobster industry will need more help, McDonald said.

Maine received $20 million out of $300 million in CARES Act funding specifically earmarked for the seafood industry. The state has yet to say how it will spend that money, but Department of Marine Resources Commissioner Pat Keliher warned fishermen it wouldn’t go far when divided up among the state’s commercial fishermen, aquaculturists and party boat charter captains.

Last month, Keliher warned fishermen that the biggest individual relief checks would probably max out at about $4,000.

As chairman of the Atlantic States Marine Fisheries Commission, Keliher has asked Congress for another $1.3 billion to address the unmet bailout needs of the commercial and recreational fishing industries.

“Demand for this financial relief far outpaces the amount appropriated by Congress,” Keliher wrote in his June 26 letter.

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