Page 19: of Marine News Magazine (September 2013)

This industry was built largely on the backs of so-called mom and pop? operations. The Gulf of Mexico is full of countless stories of how some of our industrys largest op- erators got started. The generation that came out of the bayou to ? ght the good ? ght in Europe or Paci? c theatres then came home to buy and operate the ? rst of what might become a mighty ? eet of boats. I know of operators in the Northeast whose great grandfathers rowed and sailed car- go across New Englands harbors, rough and tumble men who did not know how to quit. And, in the Paci? c North- west, many began their empires running steamboats carry- ing miners to the Alaska gold rush. And now, it is todays smaller, start-up operators who are at greatest risk from the cost of compliance with Subchapter M. That said; there are some survival strategies that might make some sense: ? Evaluate the amount of equity that you have accumulated in your vessels. You might ? nd that a signi? cant amount of cash can be available for com- pliance by re? nancing the existing mortgage on your vessels. If your loan is more than halfway through its life, given amortization of the principal, appreciation of the vessels value and other factors, as much as 40% to 50% of that value may be available to you as capital for compliance issues.? Reduce the size of your ? eet. Determine what ves- sels are now in excess of your workload and monetize them. Cash at hand is often more valuable than a ves- sel with 75% utilization.? Utilize the bene? ts of membership in a recog- nized commercial marine association like the AWO or the Offshore Marine Services Association. Why rein- vent the wheel if its already rolling? ? Work early on with a competent professional that can help you develop your TSMS and engage a quali? ed, recognized third party auditor or utilize the USCG as your inspection service.? ? For shipbuilders and repairers who are prepar- ing for the possible onslaught of compliance related work, contact a quali? ed commercial marine lender to buy a dry-dock. Loan packages can offer terms and amortization up to 15 years. If you are the recipient of a Maritime Administration small shipyard grant, contact a lender who will augment the grant amount with a term loan to help you acquire the equipment you need. The M? in Subchapter M arguably stands for money. There is no escaping that fact, but to survive the challenges the new regimen brings, be smart. Consult your ? nancial professional, your accountant and your banker to see what options are available that can help ease the pain. Richard Paine is the National Finance Manager, Commer- cial Marine Group for TCF Equipment Finance, Inc. He can be reached at 516-431- 9285 or [email protected]. MN 19www.marinelink.com MN Sept2013 Layout 18-31.indd 198/29/2013 11:12:05 AM