Marine Financing During Economic Uncertainty
The following letter was received from Philip Bartholomew of Seacoast Marine Finance and addresses the reality of marine loan acquisition during these late 2008 and early 2009 economic times. We hope that you will take a moment to review these thoughts:
Yachts continue to be bought and sold daily, even in this time of relative uncertainty. “Good deals” abound as sellers and dealers acknowledge the reality of a slowing economy. Yacht buyers, particularly those guided by competent brokers, are reaping the benefits of the current “buyers’ market” and purchasing quality vessels at prices unthinkable even two years ago.
Relative uncertainty equates with lowered consumer confidence, which distracts many qualified buyers from moving forward with the purchase of a discretionary asset like a yacht. How does a potential buyer who wants a boat and wants to take advantage of the buyers’ market mitigate his/her risk? One significant way is to preserve the cash that would have otherwise been spent on the purchase of the vessel. Marine financing provides that option.
Sophisticated yacht buyers view financing as part of a prudent business decision that permits them to minimize their cash outlay. In most cases, 70%-80% of the purchase price may be financed for up to 20 years. Competitively priced loan programs remain available from a host of prominent banks throughout the United States and Europe.
Historically, conservative underwriting principles have been, and continue to be applied: from the applicant, verification of income (via income tax returns), verification of liquid cash reserves (via account statements), and review of credit reports are required. As the mortgage is secured by the vessel, an acceptable survey and/or valuation report is also required.
In the present economic environment, proceeding with caution is paramount. Even the experts won’t know the market has reached bottom until after it is on its way back up. There will always be those drawn to the water, though, and the desire for the yachting life will likely never abate.
As always, the key is finding the right boat, negotiating an acceptable price, structuring the purchase to protect oneself as much as possible, and getting out on the water.
Philip Bartholomew
Seacoast Marine Finance
Causeway Corporate Center
1800 SE 10th Avenue, Suite 315
Fort Lauderdale, Florida 33316
(954)303-2404
Affiniti Yacht Brokerage LLC
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Lighthouse Point Marina 2711 Marina Circle Lighthouse Point, FL 33064, USA |
Toll-free 888-231-7527 Tel 954-943-1722 Fax 954-943-1727 Email Us |
