Financing

[Bill Root]

We have a couple of serious buyers for BUFFALO GAL, but they both require some level of financing to complete the deal. We are finding that the major marine financing companies that do business here in the southeast have pretty much dried up on boats over 30 years old, regardless how well maintained they may be. If anyone is aware of companies that are still lending in the over 30 market, I would appreciate hearing about them.

 

[jim rosenthal]

It appears that the only people who can get financing for older boats are those buyers who actually don't need it. But it sounds like your buyers would have to have borrowing capability or collateral independent of the boat, to get the deal done. Any chance they could get signature loans, or a HELOC, to get the deal made?

 

[Boatsb]

It's hard to justify financing an older boat. No matter the shape it's a risky decision on all parts. Many who want to buy a boat and finance it don't have the means to recover from a major event like an engine failure or generator in need of replacement which would leave the lender in bad shape.

I know I could have gotten a better boat if I spent more and financed it but with the 2007 economic downturn and other life factors I may not have been able to keep it.

 

[jim rosenthal]

You might have gotten a bigger boat, or a newer boat, but you would not have bought a better boat than a Hatteras, because there aren't any.

Just my two cents.

 

[captcrunch]

Some credit unions willTeachers fcu on Long Island, ny did mine. I believe they can do anywhere

 

[jrbrein]

I purchased my boat by borrowing from the cash value on a life insurance policy that I own. I just made sure my wife would be ok if I died to soon!

Jon

 

[Freestyle]

Has anyone ever seen any data on the size and metrics of the lending market for older boats? I can see where it is a lending market with very unique risks to manage. Sometimes those present business opportunities.

Bruce
Freestyle
1986 CPMY (54MY with cockpit ext.)
Tampa

 

[rsmith]

It's hard to justify financing an older boat. No matter the shape it's a risky decision on all parts. Many who want to buy a boat and finance it don't have the means to recover from a major event like an engine failure or generator in need of replacement which would leave the lender in bad shape.

I know I could have gotten a better boat if I spent more and financed it but with the 2007 economic downturn and other life factors I may not have been able to keep it.

Maybe I’m just a product of depression era parents and grandparents but it was drilled in me that if you couldn’t pay cash for your toys you didn’t need them

 

[lbkjj]

Have you considered seller financing to get the deal done? With a large enough down payment, it may be a reasonable
financial investment if you don't need the cash. No one knows the underlying worth of the boat collateral better
than you do.

 

[dottieshusband]

Have you considered seller financing to get the deal done? With a large enough down payment, it may be a reasonable
financial investment if you don't need the cash. No one knows the underlying worth of the boat collateral better
than you do.

That is an interesting idea.. the "but" is, with many very expensive systems, a buyer might be inclined to walk away. Lose and engine, or generator, and 30k could be out the window. Repo and relocation cost, it would have to be a very substantial down payment. Verifying that the buyer is maintaining adequate insurance would also be a concern. In theory, owner financing is very appealing in this environment of low interest rates, the reality of it could be a minefield.

 

[Byresch]

Have you considered seller financing to get the deal done? With a large enough down payment, it may be a reasonable
financial investment if you don't need the cash. No one knows the underlying worth of the boat collateral better
than you do.

I had a friend who did that and he had to take the boat back when the people walked away after a couple of years because they got tired of making the payments. I'd think long and hard about getting involved in that situation you don't know if they'd do the maintenance and what you'd get back.

 

[Passages]

I would not consider owner financing on a boat. Even with 50% down and 7% Interest.

It's not like holding paper on real estate.

 

[doc g]

I owner financed a boat three times , I was lucky as the boat stayed local and both times I took a large down payment. Both times the guy who had bought the boat showed up at my doorstep and handed the keys over without any legal action, neither asked for any money back. The marina typically makes the boat have at least liability coverage , but for hull value I guess you make that a part of the finance contract just like a bank would.......I lucked out and got a lot more for the boat than if I would have just sold it outright.......Pat

 

[jim rosenthal]

The same boat?

 

[doc g]

yes the same boat!!!

 

[Walter P]

I tried playing banker several times in the past and got burned every time.... don't recommend it.

Walt

 

[Dazed338]

That is an interesting idea.. the "but" is, with many very expensive systems, a buyer might be inclined to walk away. Lose and engine, or generator, and 30k could be out the window. Repo and relocation cost, it would have to be a very substantial down payment. Verifying that the buyer is maintaining adequate insurance would also be a concern. In theory, owner financing is very appealing in this environment of low interest rates, the reality of it could be a minefield.

Did something along those line when I bought a Duplex in Florida. PO held a small second to make it happen. There's always a cash out refi on a home, and other loan options as well.

Of course an owner holding all or part of a loan on an older boat, would show they believe there will not be any major issues.

 

[Bill Root]

Thanks for all the feedback and suggestions. I have considered owner financing. I did that when I sold our 43 and it worked out fine. The buyers were (are) great people. It's not a really good choice at my age, however.

 

[Freeebird]

Thanks for all the feedback and suggestions. I have considered owner financing. I did that when I sold our 43 and it worked out fine. The buyers were (are) great people. It's not a really good choice at my age, however.

I remember that deal.

You moving up, down, or out?

 

[Bill Root]

I know you do remember, Randy. I'm moving down and sideways. I do antique boat restoration as a retirement gig. I'm going to concentrate on that. Yachting on TUCANDU and BUFFALO GAL has been great, but it's time to simplify my life. Maybe an occasional delivery to keep some salt between my toes.