What is Boat Finance?
A well-maintained boat is a necessity for many businesses. Boat finance is a way of buying or leasing a boat without draining your financial reserves to make a large upfront payment. You’ll find a wide range of products available from specialist marine finance companies and other lenders.
How Does Boat Finance Finance Work?
Here’s a quick overview:
Term and Repayment:
Boat finance relieves pressure on your business’s cash flow by spreading the cost of a new or used boat over a number of monthly payments, which include interest and VAT. Payment terms are relatively long – usually up to 10 years, and in some exceptional cases, 15. Depending on the kind of financing you choose, you may be able to keep your monthly installments low and make a balloon payment at the end of the agreement.
Lender Requirements:
Lenders will carry out standard credit and security checks and ask you for financial documentation about your business, such as accounts, income statements and a detailed business plan. If you are a homeowner, you may receive more favourable interest rates, since you can use your property as security.
What are my options for boat finance?
Depending on the size, cost and purpose of the boat you want to acquire, you might find a loan or a marine mortgage more suitable.
Business Loan:
A business loan can often be enough to cover the cost of a smaller vessel, such as a fishing boat, motor boat or dinghy. Loans can be secured or unsecured. In the case of a secured loan, you’ll need to offer an asset as collateral, and you’ll generally be offered a lower interest rate, a higher borrowing threshold and more flexible repayment terms. When applying for an unsecured loan, you may be required to provide a personal guarantee.
Marine Mortgages:
Marine mortgages are the best option for large, high-value vessels. Like a home mortgage, it’s a type of secured loan that uses the boat as collateral. You’ll pay a deposit and pay off the remaining balance in monthly installments. Unlike a house, however, a boat depreciates relatively quickly, and it’s also a movable asset, making it a higher risk for the lender. This means that agreement terms are shorter, usually around ten years, and you’ll be asked for a significant deposit.
Some marine mortgage providers offer separate mortgage products for inland vessels, such as houseboats and barges, and seagoing vessels such as cargo ships.
Can I refinance my boat to release equity for my business?
Yes! Like any high-value asset, you can use a boat as collateral for a loan, and you can also refinance it to release some of its cash value. In this case, you will sell the boat to the lender, and then lease it back from them in order to keep using it for your business.
Boat Finance Made Simple
Spread the cost of purchasing a boat with flexible finance tailored to your budget and plans.
Whether for leisure or commercial use, structured boat finance helps you secure the vessel you want without large upfront capital outlay.