Marine financing covers a vast array of programs tailored to suit your specific needs. These will include the following categories: yacht financing, boat financing, new boat loans, used boat loans, marine loans, boat refinancing and new yacht construction financing. Working with a qualified marine financing professional is the best way to navigate the myriad of choices available. In addition, marine finance specialists can assist in the following: underwriting and analysis of complex high net worth individuals and self employed business owners; ownership structures including Trusts, LLC’s, foreign and domestic corporations; sales tax laws; United States Coast Guard documentation; foreign flagging and offshore registration; collateral evaluation; foreign delivery. Knowledgeable marine financing professionals will guide clients through every decision required.
Both simple fixed marine loans and variable rate marine loans are available. Marine financing is offered without application fees, pre-payment penalties or points. Most boat loans require a 20% cash down payment and finance 80% of the selling price and taxes. Typically, boat financing ranges from $50,000 to $500,000; yacht financing ranges from $500,000 to $5,000,000; and superyacht financing ranges from $5,000,000 to $200,000,000. The payment terms on loans over $100,000 are up to 20 years. Marine loans can be tailored to meet each customer’s purchasing requirements and needs.
International superyacht financing is a specialized area within the marine financing field. Working with a seasoned marine financing specialist with unparalleled market knowledge and the very highest professional standards will facilitate the process of securing an international superyacht financing. Enlisting the services of a marine financing company that specializes in international superyacht financing for vessels registered in offshore foreign registries is a smart choice.
International superyacht financing offers financing to international citizens. The loan qualifications are as follows: the minimum loan amount is $5,000,000; 100% financing of the purchase price with 30% or more placed in SG-Private Banking in Monaco as depository income. The loan requirements are as follows: completed superyacht financing application; provide a personal financial statement; provide a professional background summary; provide complete personal tax returns for the last two years; provide complete corporate tax returns for the last two years (if applicable); provide a copy of recent bank statements; copy of passport for non-U.S. citizens.
The marine finance specialists we partner with have access to an extensive network of banks and lending institutions. This offers clients access to the most competitive marine financing programs in the market. Discriminating boat and yacht buyers choose to work with marine financing specialists due to their unique financial analysis expertise. Dealing with one marine financing specialist from the initial filing of a boat or yacht loan application to the closing offers buyers a high level of security and personalized service. If you need assistance with various boat and yacht loan options, tax issues, setting up an offshore foreign registry of a vessel or marine insurance, a marine financing specialist with be there to help navigate the myriad of choices.
Below is a summary of the various topics you can expect to encounter when seeking marine financing:
Documentation The United States Coast Guard offers a vessel documentation service to recreational boats and yachts, as well as commercial vessels. The purpose of the documentation service is to provide a history of every vessel in the United States that is entered in the database. This history will keep track of the ownership of each vessel entered, any changes in ownership and the different names a vessel has operated under. Also, any liens and encumbrances on the vessel will be recorded with the United States Coast Guard’s documentation service. Finally, all vessels documented with the United States Coast Guard come under the protection of the this body in the event of an emergency or dispute while operating in international waters.
Ownership Most yachts and superyacht owners setup legal ownership that offers protection such as an LLC or an Offshore Registry. LLC’s are popular with yacht owners looking to avoid certain taxes and fees associated with yacht ownership. In addition, LLC’s limit the liability of the owner in the event of an accident or injury to the crew, guests or a family member. Finally, they offer the benefit of providing the owner some privacy, since the LLC will be the owner of public record. Offshore Registries are popular with superyacht owners looking to avoid certain taxes and fees associated with yacht ownership. They offer a higher level of privacy, which the wealthiest clients in the world all desire. Yacht ownership is an exclusive club, and superyacht owners want to maintain their privacy at any cost. Consulting with accountants and lawyers who have acquired a level of expertise in the intricacies of maritime law is a wise choice.
Insurance Marine insurance is a pre-requisite to owning and operating a boat, yacht, superyacht or commercial vessel. Over the years, our team has had an opportunity to partner with the leading marine insurance and marine financing companies in the business. The marketplace for marine insurance is constantly in motion due to the changing weather patterns around the globe. This can lead to fluctuations in the insurance policy pricing and the levels of deductibles. Through our extensive network of marine insurance partners, we can match you to the marine insurance provider best suited to a client’s specific needs.
Refinancing Refinancing a boat or yacht loan is very similar to refinancing a home loan. It’s a good idea to check in with your marine financing specialist semi-annually. Banks looking to lend money will offer strong incentives at different times of the year in an attempt to increase the amount of money they are lending. Certain marine finance companies will offer very aggressive lending rates as a special promotion. Marine financing rates are always fluctuating, and securing a lower rate can save you a significant amount of money over the life of your boat or yacht loan.
Below is a summary of the various terminologies you can expect to encounter when seeking marine financing:
Cash Down Payment A Cash Down Payment of 20% of the boat or yacht purchase price and the taxes owed is required at the closing. Please note that there will be occasions when a lender may require a lower or higher percentage cash down payment.
Comparable Credit Comparable credit takes into consideration your lending history to date and compares this with the amount of your current loan request. If you are looking to take out a loan for $2,500,000, the bank wants to see that you have paid off a loan of this size at some point in the past.
Credit Score Credit scores are based upon your credit history with the three major credit bureaus; Equifax, Experian and Transunion. The other terms commonly used when discussing credit scores are FICO or Beacon.
Debt to Income Ratio Debt to Income Ratio is the amount of monthly debt divided by the amount of monthly income. Banks are looking for a Debt to Income Ratio of less than 40% inclusive of the monthly yacht payment.
Liquidity Liquidity is the amount of cash, receivables, annuities and marketable securities you have available to meet your financial obligations. Typically, banks are looking for a loan applicant to be able to pay a minimum of six months worth of monthly debt payments.
Net Worth Net Worth is the difference between the values of your total assets minus the amount of your total liabilities. Banks are looking for loan applicants net worth to be two to three times the value of the yacht.
Personal Financial Statement A Personal Financial Statement is a list of your current assets and liabilities including the following: cash, receivables, annuities, marketable securities, real estate, credit card debt and home mortgage debt.
Rates and Terms Boat and Yacht Loan Rates and Terms will vary depending on your marine financing requirements. Please note that in order to secure a special rate, the terms may require a client to pay points up front, make a larger down payment, the loan could be adjustable or it may have prepayment penalties.
Working with a marine financing specialist will enable a client to navigate the myriad of choices and decisions you will face. Decide which marine financing rate, down payment, program options and bank and is best suited to you personal needs. A marine financing specialist will assist you in evaluating all of the rates being offered by the banks and determine the program that is the best fit for you.
The leading marine financing specialists are knowledgeable and passionate yachtsman in their own right. Combining decades of expertise as avid yachtsman as well as handling the financing of hundreds of millions of dollars offers a unique skill set. Working with a dedicated marine financing specialist gives clients access to the best banks in the United States and from around the world. Turning over the negotiation process for a yacht financing or leasing contract is a smart move.
International superyacht financing is a niche market that requires specialized knowledge and expertise. Clients seek international superyacht financing for various purposes such as financing the purchase of a new yacht, financing the purchase of a pre-owned yacht, financing a refit or rebuild, refinancing an existing yacht loan and transitional financing. International banks will offer yacht financing based on a mortgage on the yacht in addition to a personal guarantee by the purchaser to repay the loan. The securities required for international superyacht financing are as follows: first mortgage or lien on the yacht; personal guarantee or liability of the owner to repay the mortgage or lien; assignment of the insurance policy on the yacht.
Are you new to the world of superyacht ownership? International superyacht financing involves much more than just taking out a mortgage on a yacht. International superyacht financing specialists will give you an unbiased market valuation of the yacht. In addition, you will be provided with an evaluation of your finances and the amount of financing for which you qualify. Then, the international superyacht financing specialists will guide you in acquiring the most cost effective financing solutions.
Are you considering financing or leasing a yacht? International superyacht financing specialists will explain the differences between financing and leasing a yacht. Are you considering building a new construction yacht? International superyacht financing specialists can assist clients in reviewing new yacht construction build contracts and yacht construction insurance contracts. Are you a first time yacht buyer? International superyacht financing specialists will simplify the process and guide you through all of the intricacies of becoming a yacht owner.
The main reason clients finance or lease a yacht is to avoid tying up their capital. Financing a yacht purchase or leasing a yacht keeps a client’s options open. High net-worth clients recognize that when investment opportunities arise, you need to have the financial wherewithal to take action. Therefore, financing or leasing a yacht keeps a client’s assets liquid, and affords one the opportunity to grow their fortune.
Yachts purchased in Europe are required to pay a Value Added Tax (VAT). The VAT is calculated based on the yachts purchase price and is paid to the tax authorities in the country it is delivered. The VAT Paid designation on a yacht means that the tax has been paid to the tax authorities. The tax authorities throughout Europe are paying more attention to the correct application of VAT regulations as it applies to the yachting industry. This is due primarily to the fact that there was no uniformity to the application of these rules and regulations. As a result, the VAT on yacht sales was going uncollected in some cases. This has lead to stricter enforcement policies of the VAT within the yachting industry. Although there are methods to avoid paying VAT, it is essential that you work with a marine financing specialist to learn if this route is available to you.
Leasing a yacht in Malta, Italy and France offers considerable tax benefits. Each of these countries offers a reduced Value Added Tax (VAT) for yachts costing over 500,000 Euros. This tax advantage increases based on the larger size of a yacht.
The tax authorities of Malta, Italy and France recognize that yacht sales are an important part of their economies. In order to insure that the yachting industry continues to thrive in Malta, Italy and France, each country has made certain modifications to the VAT payment terms for yacht leasing companies. The governments of Malta, Italy and France have each developed their own leasing methodology, but they all share certain characteristics. First, the governments of Malta, Italy and France offer yacht leasing companies a reduction in the upfront VAT payment based on the terms of the lease. As a result, the VAT is collected in smaller stage payments over the term of the yacht lease. This is advantageous to paying the VAT at the time of the yacht purchase and/or delivery. The logic behind offering yacht leasing companies a reduced VAT payment is the expectation that these yachts will be spending a significant portion of the year outside of European waters.
The yacht leasing methodology of VAT reductions offered by the government of Malta and Italy respectively is dependent on the size and type of yacht. In contrast, the VAT reductions offered by the government of France are applicable to any size and type of yacht. Finally, the governments of Malta, Italy and France all require that the yacht lease be partially financed by an external lending institution.
Working with an international superyacht financing specialist is the best way to determine if yacht leasing is a viable option for you. An international superyacht financing specialist will have experience representing clients that have purchased yachts utilizing the Maltese, Italian and French Yacht Leasing methodologies. Different leasing terms and conditions have developed within each of these countries leasing methodologies. Therefore, it is advisable to have an international superyacht financing specialist determine which of these yacht leasing methodologies offers the greatest benefits to you.
The Maltese, Italian and French Yacht Leasing methodologies require that certain terms and conditions be included in the yacht leasing contracts. First, the party leasing the yacht will have a pre-determined purchase price based on the original yacht purchase price. This right to purchase the yacht outright can be exercised according to the yacht leasing terms and conditions. The party leasing the yacht will be responsible for maintaining adequate insurance coverage for the duration of the yacht lease. Both the party leasing the yacht and the party providing the yacht lease will agree to the length of the yacht leasing contract at the outset. In addition, all of the annual operational expenses will be the sole responsibility of the party leasing the yacht. These operational expenses will include crew compensation, docking fees, maintenance and repairs and miscellaneous supplies.
There are numerous reasons why yacht leasing is an attractive alternative to yacht ownership. The most common reason is to reduce the VAT payment that would be due at the time of a yachts purchase and delivery. Typically, this applies to new yacht purchases, yachts owned by an Offshore Registry and yachts entering European waters that were purchased outside the European Union. All of these yachts would be missing the important VAT paid designation, and therefore be required to pay the VAT to the local tax authorities. Working with an international superyacht financing specialist will enable you to determine which is the optimal yacht leasing methodology for your particular needs.
