We now have the ability to work directally with lenders to get the best possible terms for our customers. This means that we can negotiate with the lender on behalf of clients with "B" and "C" rated credit to secure an acceptable boat loan.

This also means that we have the ability to "give back" loan points to the buyer in order to close a sale! This is a powerful tool that few if any brokers can offer their clients. Imagine receiving thousands of dollars off your loan. That's what Randal Burg Yacht and Ship can offer potentinal buyers.

WHAT HAS YOUR BROKER DONE FOR YOU LATELY??

WHY THE MARINE INDUSTRY NEEDS ITS OWN CREDIT UNION:

The Marine Industry, like every other industry, is based on the concept that each company supplies the service that they know and do best: Brokers sell boats, engine builder build engines, service company’s service boats, and banks and finance companies supply funds to boat buyers. The entire process is linked together. When one of the links is broken is it time for a change.

Banks and finance companies have failed to do their job- to supply finds to boat buyers. I’m talking about funding buyers that have negotiated a significant reduction in the asking price, have a high FICA score, show significant income owns property, is a company owner, etc – and the banks have elected to pass on finding the purchase.

Shame on the banking industry!! Wake-up - cannot cherry pick your loans and expect the industry to stand by and take it. We are partners in every transaction and when the partnership fails then it is time for our industry to find a way to eliminate you from the process.

With the advent of a Marine Industry CU we are putting the banking industry on notice – WE WILL NOT TAKE IT ANY LONGER!

I fully support a Marine Industry CU that will give back to the industry control of it's transactions.

What is the difference between how traditional lenders operate and how a Marine Industry CU would operate: The Marine Industry CU would be owned, operated, and funded by the Marine Industry.

Why is this so important?? A traditional bank addresses a non-performing asset in a very different way then a CU operated by the industry would- they are tasked with getting non-performing asset off their books as fast as possible. Translation - dump the boat at any price and to hell with the client and the effect dumping will have on the market.

Because a Marine Industry CU will be owned and controlled by the industry, i.e., dealers and brokers who understand boats and the boating market, non-performing assets will be handled in a very different way. When was the last time a bank sent out an email to the 10,000 brokers in the US requesting help in finding a buyer for a non-performing asset?? The answer is never. They turn the boat over to an auction house or other liquidator. But a Marine Industry CU has a vested interest in not only keeping the owner in his boat or in finding a suitable buyer for the boat that does not adversely affect the owner’s credit or the value of the boat. A Marine Industry CU, because it is involved in the industry, has far more tools available to them and very different goals then traditional banks. The CU will see the boat owner not as a number on a spread sheet but as a partner!

I recently got a call from a bank that wanted to repo a client boat when they got behind one month!! I made one call and within 30 minutes put the boat owner together with a “Angel Partner”, i.e., a partner that, in exchange for use of the boat, paid all the expenses, including the monthly bank payment. The boat stayed in the name of the owner - everyone won. The bank had a “performing asset”, the owner was able to have his expenses covered, and the “Partner” got the use of a boat without putting up a down payment or having to apply for a loan.

This is the kind of action that banks should be taking but are not because they do not have the industry knowledge or simply do not care!

Brokers earn their money from commissions while bankers get a salary. Brokers are on the docks, on the water, at the marinas building personal relationships with their clients - when was the last time you saw your banker walking the docks??

A Marine Industry CU, owned by and run by the industry, will be run by and for its’ members. The members are the stockholders!!

The boat the bank failed to finance, the one mentioned above - – I sold a week later to an all cash buyer. Please explain to me why a buyer will put up $235,000 CASH to buy a boat that the bank would not finance??

the original buyer, having given up on using bank financing, the one that was turned down, is buying a boat for all cash - $115,000 boat (the original boat the bank turned down was $245,000). Please explain to me how the bank can justify walking away from a buyer with this kind of buying power! You can’t – it does not make sense on any level. The smart banks lost not one but two loans – so how happy are the banks stockholders knowing their manager are walking away form very profitable, very secure loans and very possible repeat business from these clients??

Another client called me to say that he put 50% down on a brand new 47 Rivera but his dealer would not or could not arrange financing for the balance of the purchase! A new Rivera 47 is in the range of $900,000 and my client ( I did not sell him the Rivera) had $500,000 cash for the down payment. I got to work and found him $250,000 from one bank and then personally lent him $150,000 for 6 months. Yes, my client secured my personal $150,000 loan with other assets BUT paid off the loan in full within 6 months!! I worked with the bank to look at his cash position, his cash flow and future earning power and his other assets. Welcome to the new world of boat financing!

Can you tell me why a bank would not fully fund a client with that kind of earning power?? It’s because banks rely too closely on in-house formulas and FICA scores and not enough on personal relationships, additional collateral, and assets and not FICA scores only.

The cost of client acquisition is the most expensive line item in any business. Clients are the life blood of any business – there is no possible justification for banks to ignore this kind of high-quality clients. This client will stick with me for a very long time. We have become close friends and he calls me every other week with lead on buyers & sellers looking for boat to sell or list.

Speaking of formulas, I suggest you read (and anyone else interested in our economic future) the article in the recent VANITY FAIR Dec. issue by Niall Ferguson titled “Wall Street Lays Another Egg”. The article talks about the Black –Scholes formula that guaranteed we would never have another market crash!! (Schiles & Merton won the 1997 Noble Prize for the formula!!). The formula failed to take into two very key factors: (1) it was based on 5 yeas of data but should have been based on 90 years of data, and (2) it failed to take into consideration the Human Factor. Sound familiar? Banks using rigid formulas and failing to work with their very Human clients to solve problems and make loans!!

It is time for a change.