Most business and many individual will require a loan to purchase their boat and there are a range of options available – in loan products and ways to source the best loan.
Personal Boat Loans
If you’re purchasing a boat purely for your own personal use the options for boat finance include:
Secured Boat Loan:
This is the most popular loan for individuals buying a boat. With this type of loan, the lender will take the boat as security against the loan. It usually features a fixed interest rate, fixed monthly repayments and a fixed loan term. Additional payments are permitted and only minimal break fees apply if you pay out the loan early.
Unsecured Personal Loan:
There may be situations when the boat is not suitable for or accepted by the lender for security against the loan or personal circumstances prevent the borrower from offering the boat as security. Some lenders won’t accept older boats as security. If you are buying the boat with a group of friends or family, it may not be appropriate for you to offer the boat as security against your share. With no security, the interest rate on an unsecured boat loan will be higher than on a secured loan. The interest rate is usually variable but the monthly repayments and loan term is fixed.
Extra payments are allowed and if no break fees apply if the loan is finalised prior to the end of the loan term.
Personal boat loans are available to purchase fishing boats, jet skis and PWCs, houseboats, power boats, yachts and sailing boats and all types of cruisers.
Commercial Marine Finance
A range of commercial finance products are available to businesses for the purchase of marine vessels and boats used for business purposes. They include:
• Marine Chattel Mortgage
• Marine Commercial Hire Purchase
• Boat Leasing
Depending on your business structure, accounting method and financial objectives will determine which is most appropriate for your business. A discussion with your accountant is advised to make this decision.
Sourcing Boat Finance
You can approach your bank or a finance company for marine finance or a personal boat loan, but significant benefits can be realised if you use the services of a licensed, qualified finance broker with specific expertise in marine finance. Broker services are available to both individuals and businesses and work in the interest of their clients to secure the cheapest boat loans possible.
When selecting a broker, ensure they are independent and not associated with a particular finance company or bank. Also ensure they have sufficient accreditations with a vast number of lenders so they have more choices to secure you the cheapest rates and best loan terms. Also ensure they have the expertise and experience in marine lending and are licensed.
Just as your boat broker has the right networks to source you the boat you want, your marine finance broker has the right lender connections to source you the best boat loan.
We know people that are specialists in marine finance and boat loans. For more details, please contact us.