Join Date: Jun 2007
Location: Sebastian, FL
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Drawing on my experience as a loan rep at a boat finance company(indirect lender) when marine loans were almost as easy to get as home mortgages. Well, not quite, but if your equity in the boat to be purchased, i.e. downpayment, ranged 15% or more, had verifiable income, work history AND a good credit score, approval was given at a market rate. We made the loans as they should be made; the right way based on traditional lending principles. Now, after the aforesaid mortgage loan debacle continues to affect the lending market, boat loans have all but dried up as the banks have overreacted and pulled out of the business thinking boat loans represented high risk while the opposite is true. They threw the baby out with the bath water type thing. The finance companies now have a very reduced market to place the loans with bank funding sources. That is indirect lending. It's still out there as your source of financing. You can also try to go the direct route with banks that choose to stay in the business. I'll recommend some names.
This is what you're going to be facing. You are now seeking to borrow in arguably the toughest boat loan market of recent history. Banks that are still lending are more stringent in their requirements. I do caution you, however, to NOT mortgage your house to buy the boat. That is equivalent to "betting the ranch." You just shouldn't do it. Let the boat be completely separate. If you are planning on living on the boat, you might want to just swallow the anchor and sell the house outright to increase the downpayment on the boat. In this market, even the good guys out there will be looking for that to compensate for the worldwide credit mess. There are still banks in the market because they are experienced lenders and know that marine loans rank far below other loan products in terms of loss experience. Made right, they are a good asset for them. They were never a large part of a banks portfolio, but were proven performers. Boat loan defaults were less than 1% of outstandings while auto loans were always double digits. I recommend you talk to a marine finance expert to discuss your options, but don't merely call the local bank. You will find that SunTrust, Essex Credit, Schwaun Funding, First Commercial Credit Corp, to name a few, are willing to advise you. They will help with different scenarios that they know will work in this market. The Marine Bankers Association can also provide ,more names of additional marine bankers you might call to help with your questions. This is specialized lending so use those who continue to be in the business. Fair winds.