Though the majority of yacht purchases are made in cash, there are some innovative companies in the yacht finance sector
If you are one of the many boat owners who buys with cash, then great – you can saunter on by. It’s a relatively simple transaction: find the new or used boat you want, do the survey, sign a contract and transfer the cash to the broker’s account.
But for a significant minority, some kind of loan will be either necessary or preferable to fill the gap between dreams and reality. And the simplest way of borrowing the money to buy a boat, is to borrow against the boat, from a lender that specialises in the marine sector.
There used to be numerous players in this space, but the constant tightening of credit rules has seen it boil down to a handful of experts. The French-backed giant CGI-Finance stands behind several financial brokers, including General Yacht & Leisure Finance (GYLF), based in Lymington. Other brokers include Sure Marine and Pegasus Marine, while Close Brothers, Promarine, Arkle and Lombard all lend out their own funds.
It’s immediately clear that the cost of a boat loan is much higher than you might be used to for mortgages or personal lending. At the time of writing, quotes ranged from around 8%-16%. Most are on a variable basis, so volatile base rates will affect monthly repayments.
This story is from the April 2023 edition of Yachting World.
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This story is from the April 2023 edition of Yachting World.
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