Seeking finance options for late model sail boat

[devildogwind]

If anyone has any input it would be greatly appreciated. My wife and I are looking to purchase a late model high end sail cat and place it into a charter program to offset some of the expense. The boat will be placed in the BVIs. Was wondering if anyone had a good idea of the best route to take. I looked at Boat/US but don't want to complete and application until I know which company we want to go with because we don't need multiple companies pinging our credit which could hurt our overall score. Thanks again!

[Capt Phil]

If you're looking for general input, I would very careful about doing the kind of deal you are considering. I had a close friend research several well known Carribean charter companies offering the buy/charter/owner deals and there is only one side of the deal that does OK in the transaction. Caveat Empor... but good luck, Phil

[devildogwind]

Thanks Phil. Actually, the option we would take would be the direct revenue/expense option whereby we purchase the boat and place it into charter through the mgt company who would market and manage and maintain it. Actually, we have been doing due diligence for over 8 months on the charter management aspect of it only to find that we had a close friend who had done the same thing, learned the hard way several years ago and who is now with a management company in the BVI they love and we are considering them overall because they TRUST them primarily. What we are looking for now is the best way to handle the financial end of things.

[Capt Phil]

One of the major issues as it has been explained to me is to ensure that vessel maintenance is done regularly and completely by the charter company. They are in the business to make money and some very good companies get tarred with a bad rep from the industry in general, some of whom scrimp on the maintenance end. Their boats are clean and presentable but basic mechanical and rigging maintenance and replacement may not be up to snuff. If you do your due diligence on how they perform in these important areas and the numbers work, you will probably OK. Sounds like you will benefit from your friends' experience which is great to have. The charter companies themselves have some reasonable financial connections that migh work for you. Good luck, Phil

[dgasmd]

I would first contact the company in the BVI you are considering and see who they recommend. Typically, they have 2-3 different lenders they work with very regularly making the entire process very easy for you.

[Doodles]

Originally Posted by devildogwind

If anyone has any input it would be greatly appreciated. My wife and I are looking to purchase a late model high end sail cat and place it into a charter program to offset some of the expense. The boat will be placed in the BVIs. Was wondering if anyone had a good idea of the best route to take. I looked at Boat/US but don't want to complete and application until I know which company we want to go with because we don't need multiple companies pinging our credit which could hurt our overall score. Thanks again!

I don't think you need to go to the extent of actually putting in an application. Last year I consider financing a boat and my broker gave me a couple companies to check with. All it took was a brief telephone conversation to find out their rates and terms for what I was looking at.

[jostalli]

From my research most finance companies will want:

20% down for up to 20 year term
Full Documentation (eg. 2 years tax returns)
Net worth of 100-150% of boat value

If you are buying it as a business then I recommend using one of the finance companies the charter company recommends as the details will be different than for private use.

[Capt.Alex]

I agree with what jostalli said. I just went through the financing thing with a company that specializes in marine credit. They shop it around just like a mortgage broker for the best deal for your unique situation. I was just quoted 3.99% Apr 20 years, 20% down. I can recommend the broker I used. If interested I will PM you the details.

[Hermanns]

Just be careful at around 25+ yrs old the downpayment increases to 30%

We had that happen after the underwriter got involved in the review process.

Just a heads up - 20% is the minimum and they may try to increase depending on Survey results.

[jostalli]

The down payment can also increase if your net worth is not at least 100% of the boat value. Some want 150% or more of boat value. Some banks want that to be liquid assets.

To those who just commented, are my comments consistent with your finance experience?