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School of Finance: A Lesson in New Boat Loan Options

New Boat Loan Options

You’ve no doubt done your homework and you know exactly where to go to buy your new boat – from a dealer, online or private source. You may have had your eye on a particular model for some time and researched all the suppliers and prices offered.

To enhance your boating pleasure you want to match that new boat experience with a sleek and shiny boat loan which is arranged with streamlined precision and simplicity.

To achieve this you should also do your homework on new boat loan options.

Sources for New Boat Loans

Most private individuals think the only sources for finance are the bank and the highly promoted finance companies.

However, as most businesses already know, dealing with a finance broker is a valuable source to acquire finance deals and the same service is available to private individuals also.

So you have the 3 options: bank, finance company, finance broker. Which Loan Source Offers the Best Benefits?. Here’s a quick lesson by comparing the options.

Finance Broker

  • Have accreditation with many lenders including those not necessarily known to or accessible to private individuals. ie ‘trade only’ finance sources.
  • More lending sources means more lending products from which to select the most appropriate for your boat loan.
  • Have specialist marine finance lending products, which are not offered by the banks and finance companies.
  • Are independent of alliance with any particular financial institution and under no obligation to promote any particular loan product above others.
  • Flexibility to structure applications even for poor credit and no documentation loans.
  • Handle all the details and arrangements for you.
  • Save you the time of shopping around yourself.
  • Canvass the cheapest interest rates and deals available.
  • Can structure the loan elements, ie interest rates, loan term and residual to suit your specific purposes.
  • Know how banks price their loans and can counter with competitive offer.

Banks

  • Limited to offering you a loan product within their company portfolio
  • Rarely have a specific marine finance product to offer and may substitute with a loan product at a higher rate.
  • Strict guidelines for loan applications especially in regard to poor credit applications

Finance Companies

  • Limited to their corporate portfolio of products
  • Don’t all have a specific marine loan product
  • Advertise fast approvals but often these are loans at higher rates
  • Applications must fit within their matrix. Those that don’t are often rejected or offered high rate loans or strict conditions included.

Commercial Finance Options

If you’re purchasing a boat for business purposes including working vessels such as dredges, tug boats, charter vessels, hire boats, there are a number of financial products for you to select from.

    • Chattel mortgage
    • Lease
    • Commercial Hire Purchase

The right option for your business will depend on your accounting method and business objectives, so a discussion with your accountant is advised to assist in your decision.

Your finance broker will prepare quotations for your boat purchase, handle all the details including settlement matters to save you time and money.

If purchasing from an overseas buyer, the broker may also assist with import and freight matters and customs clearance as well as international currency transfers.

So it is definitely worth discussing your new boat loans with a finance broker