In 99% of cases a broker should be able to secure the loan against the boat itself, rather than requiring real estate as collateral.
The perfect storm that battered the world economy is beginning to clear and the sun’s starting to shine on the boating industry. Yet while confidence is returning, the major banks are still showing a reluctance to dip their feet into the water. So if you’re looking for a new boat and will need finance, in 2010 you’re going to need some serious help. Think of it like fishing for money, it’s not just a matter of going to the same old spot hoping to hook the finance, you’ll need to have your tackle in order to land a good catch.
In this challenging economic climate, brokers are having an increasing role in securing finance at reasonable rates and terms. The latest banking research indicates that credit will still be tight during 2010, meaning boat buyers will have to be on their game to secure funding. Several international financiers actually pulled out of the Australian market last year, making the situation even tighter.
We spoke with specialist finance broker Finlease who has quite a track record with not only all forms of pleasure boats, but knows the ins and outs of charter boats as well. Brokers like Finlease are cautioning that now more than ever it’s important to have your finance application presented correctly to a potential lender, as you don’t get a second chance to make a good impression.
Financiers want to feel a level of comfort in seeing that you have the means to repay the loan, and the security to cover their exposure. In 99% of cases a broker should be able to secure the loan against the boat itself, rather than requiring real estate as collateral. Typically banks don’t understand boats display relatively good retained value over time. This is in contrast with other major purchases like cars for instances, which can lose up to 40% of their value in the first year. Chances are, your local bank manager won’t know a Riva from a Riviera, so a good broker can save a lot of heartache.
Go through the checklist to quickly review your financial position. Before you even get yourself into a boat purchasing situation it’s a good idea to put an application in place for a hypothetical boat. Finance brokers can access funds from a range of lenders, to provide you with funding at the right rate and with more flexible terms. Once you get the approval, then you’re in a position to go shopping and will have the bargaining power to negotiate with the seller.
At the Sanctuary Cove International Boat Show, expect to see some boat manufacturers and dealers who will perhaps be less willing to negotiate than they were at this time last year. So if you can save some money on the finance, you’ll be ahead from the start. This article has been prepared by specialist boat finance broker Finlease who will be on hand at the Sanctuary Cove International Boat Show to answer all your questions and provide assistance. Finlease will be located on the South Promenade at stand SP8-P.