Whether you are purchasing your first yacht or your third, or are currently a yacht owner in need of refinancing or an upgrade, our yacht financing loan programs are structured to provide you with the most attractive options in the industry. Even if you are somewhat credit challenged, we can arrange loans that meet your requirements.
How Asset Financing Works for Yachts
If you’ve ever taken out a mortgage on a home or a loan on a car, then you are already familiar with how asset-based financing works. In simple terms, the item purchased is used as debt collateral for asset-based financing.
This is the same concept behind asset-based yacht financing. The vessel you acquire financing for stands as the collateral for the loan amount, giving the lender the right to repossess the yacht if you default on your payments.
Typical asset-based loans are simple interest loans with fixed rates and fixed terms. As with any loan, interest rates can vary based on several factors including your credit score, income, liquidity, and more. In most cases, however, asset-based loans are almost always lower than those for an unsecured loan.
Benefits of Asset-Based Financing for Yachts
Asset-based financing is a great loan solution when it comes to yacht financing because the yacht is the actual loan collateral, allowing borrowers to generally receive better terms and lower interest rates. It can be the case that banks and other institutional lenders view yacht loans as a higher risk than other types of loans. With asset-based yacht financing, however, financing is often faster and easier to qualify for than an unsecured loan because the vessel itself provides the loan security should you default on your loan.
Tips for Applying for Yacht Financing
Now that you understand what asset-based yacht financing is and how it works, we’d like to give you a few tips before you apply for your loan.
As you consider asset-based yacht financing it’s important to factor in any additional costs for purchases you may require for your new vessel. Buying a yacht can come with quite a few extra expenses including navigation equipment and electronics, antifouling, and anchoring packages. Any extra expense that qualifies as a tangible expense can be rolled into your loan amount.
Be sure to gather all necessary financial documents to ensure a quick and easy loan application process. Please feel free to contact us regarding what documents will be needed prior to filling out your loan application.
Lenders that specialize in yacht financing know the industry, which may result in a loan that is easier to finance with better rates, and insider boat financing tips.