In the ancient Greek and Roman worlds, centred as they were on the Mediterranean, maritime transport was far more practical than land transport for long- and even medium-distance trade. Most ships seem to have been of medium size (around 70 tonnes burden) and to have been owned and run by a shipper who both carried goods as freight and traded on his own account. There were also many individual merchants who hired shipping as needed for their ventures. Then as now, the major expense in trading was the investment in purchasing goods; roughly, one cargo of wheat was worth as much as the ship. Hence a merchant, whether or not also a shipowner, often needed third-party finance, for which, because of the peculiar risks involved, a special type of loan was used. This was the maritime loan—nautikon daneion in Greek, nauticum faenus or mutua pecunia nautica in Latin.

The maritime loan is first attested in 4th-century bce Athens, in four speeches attributed to Demosthenes, of which the most informative is the prosecution of the brother of a pair of merchants for fraudulent default on a loan (Dem., Or. 35; cf. 32, 34, 56). These two merchants from Phaselis (Lycia, southern Turkey) had borrowed from an Athenian and a man from Carystus (Euboea), through a third-party introduction, 3,000 drachmas for a round trip to the north coast of the Black Sea using a shipper from Halicarnassus (western Turkey). En route, they were to buy 3,000 jars of wine at Mende or Scione (north Greece) to be sold in the Crimea implicitly to finance the purchase of wheat as the return cargo to Athens; the interest would be 225 per 1,000 drachmas, or 300 if they returned after the end of the safe sailing season (increasing the risk). On their return, they claimed the ship had sunk, so the loan was not repayable. The next known maritime loan comes in the 2nd century bce, in a fragmentary contract on papyrus from Ptolemaic Egypt. Here an Alexandrian lends, through a Roman or Italian intermediary, a sum of money to five merchants, including one man from Sparta and another from Marseilles, for a round trip to the “aromatics-bearing land” (Somalia); the five guarantors include another Massiliote, two more Romans or Italians, a man from Elea (Lucania), a Carthaginian, and a Thessalonican (SB III 7169).

The first attested use of a maritime loan at Rome comes from the story that the elder Cato (c. 200–150 bce) lent regularly to a consortium of fifty shipowners through one of his freedman who was in partnership with the merchants and travelled on their trips (Plut., Cat. Mai. 21.6). After a long silence, we then have a receipt of the 2nd century ce, from four shipowners of Ascalon, for a maritime loan made to them by two Roman veterans through a bank in Alexandria (SB XIV 11850), and part of a contract detailing various practical arrangements in connection with a maritime loan for a return trading trip from Alexandria to Muziris on the Malabar coast, which imply that the extremely wealthy lender involved was a regular investor in trading ventures to India (SB XVIII 13167). There are also various references to maritime loans in Roman legal sources, from the 2nd century ce through to Justinian, some stating principles, others discussing real or fictional disputes. Section 22.2 of the Digest, for instance, is wholly about nauticum faenus, while Dig. 45.1.122.1 is an opinion of Scaevola (170s ce) on a fictitious case involving the slave of a Roman resident in Rome making a maritime loan to a shipper in Berytus (Beirut) for a round trip to Brundisium; and Cod. Iust. 4.33.2 is a ruling of Diocletian (286? ce) on a petition from the defrauded woman lender of a maritime loan for a round trip from Salona (Split) to Africa.

The maritime loan thus seems to have been a Greek legal form, which the Romans adopted, and which remained in essence the same across the centuries, even if in the Roman period it was used for much bigger and more complex enterprises. The relative paucity of ancient references is outweighed by their longevity and consistency, which imply this was a common way of financing commerce for almost a millennium of Mediterranean history. In its basic form, it was a loan made by an investor to a merchant for a single trading trip, normally a return voyage. The loan was to cover the costs of purchasing and shipping a return cargo, from whose sale the merchant would repay the loan and interest on it, pay his other costs, and make his profit. The merchant could also purchase and ship an outward cargo, and sell that to buy the return cargo, but that was optional. The deadline set for repayment was always less than a year within the parameters of the Mediterranean sailing season (March to October). The main security for the loan was the cargo brought home by the merchant; if the loan or the return cargo was lost at sea through force majeure (storm, shipwreck, piracy), the investor bore the loss. If the investor suspected negligence (not purchasing a suitable cargo, late return) or fraud (faking loss at sea), he could sue the merchant, whose whole property would then be liable. The investor often sent a representative (supercargo) on the trip to guard against fraud. All kinds of variations were possible, including loans made by or to groups of parties (both in Cato’s case), or cabotage trips involving several cargoes, but the principal variant was when the merchant also owned his own ship, in which case he had no freight charges to pay, but his ship was also liable as security for the loan. This has often been mistaken as ship-insurance (bottomry) by scholars, but if the ship went down, the loss was entirely the owner’s, and he was simply not liable for repayment of the loan for the cargo.

The essential peculiarity of the maritime loan was the level of risk accepted by the investor because of the inherent riskiness of sailing, the opportunities for fraud, and the mobility of merchants and consequent difficulty of claiming against them. Because dates of loan and for repayment varied, it seems that the interest due was usually expressed as a lump sum. However, because only one major return trip was possible per sailing season, this could be represented as an annual rate of interest, and Roman law, apparently following Greek practice, exempted maritime loans from the standard maximum rate for usury, which in the Roman empire was 12 percent per annum. The only figure we have for the actual returns is the 22.5 percent, or 30 percent in the Demosthenic case, but there is reason to think this was the usual range. In his anti-usury drive, for instance, Justinian capped maritime loans at 12 percent, as compared to 4 percent to 8 percent per annum for other loans, which had previously been capped at 12 percent (Cod. Iust. 4.32.26.1–2). Justinian’s cap, if enforced, could have made the risk of maritime loans unacceptable to investors, but the actual outcome is unknown.