Milos Simovic had grand plans for Cape Race. He bought the 125-foot fishing trawler in 2006 and planned to charter the impressive yacht for research and pleasure excursions. Simovic pumped $1.3 million of his own money into the venture, and Cape Race began chartering small oceanic research expeditions for the U.S. Navy, NASA and the National Science Foundation, and occasionally hosting film and TV projects.
Still, despite the high-end upgrades, the vessel lacked some of the elements necessary to comply with health codes, making it ineligible to serve a wealthy clientele interested in private adventure travel — a market in which Simovic saw great potential.
Then in 2012, after Hurricane Sandy tore up the East Coast, Cape Race became an unofficial base camp for agency and government officials who would conduct storm-related business from the boat. "We were one of the few places with power, so we'd offer hot showers and I'd cook," said Simovic, who docks in Red Hook, Brooklyn. The unfortunate circumstances marked Simovic's first encounter with an NYBDC representative.
"That was a godsend for me," said Simovic, who does business as Drifting Society Corp. "I had invested everything — run up credit cards, taken money from friends and exhausted my savings. And you’re certainly not a candidate for a traditional loan when you own a ship."
In 2013 Simovic received a $225,000 loan through The 504 Company and New York's Capital Access Program to purchase additional equipment and complete renovations on the boat. Those renovations included building out some of the cabins and renovating bathrooms. The funding also paid for a washer and dryer, air conditioning and an awning on the deck. Working capital was used for website development, reserve fuel and six months of operating expense.
The Capital Access Program (CAP) is a $9 million program that can be used with term loans or lines of credit, or financing for working capital needs, technology or facility upgrades, business startups or business expansions. Independent businesses that employ fewer than 100 employees can apply for NYSCAP loans of up to $500,000 for business or facility expansion, technology upgrades, business start-up or working capital.
David Hanold, vice president, The 504 Company, said Cape Race did not have an extensive operating history at the time it was being considered for the loan, and its short tenure made it difficult to secure traditional financing.
"However, due to the pipeline of upcoming expeditions and projected revenue, The 504 Company was able to provide $225,000 in financing for ongoing repairs and renovations," Hanold said. "These renovations helped the business secure more contracts for 2014, 2015 and beyond to destinations as diverse as the Arctic Ocean, Caribbean Islands and the coast of Brazil."
The private excursions on Cape Race run from $40,000 for a week in the Caribbean, to $140,000 for a 10-day charter to new, untouched routes in the Arctic. One client reserved the 10-cabin yacht for a private trip to the Amazon.
Without the loan, Simovic said, he would not have been able to book the private "adventure travel" excursions for the last two seasons: "No doubt we would still be restoring the ship piecemeal because we wouldn't have had the money to do everything right away."
Photos by: Olaf Otto Becker