What is maritime finance

Marine finance is sought for the funding or purchase of marine related equipment or vessels. Usually marine finance is granted to individuals who have passed the necessary credit checks, and who have a good financial standing, in order to purchase their desired yacht. Yacht brokers and banks worldwide offer a variety of marine finance policies; it is therefore important to be aware of the policies that are most suited to your personal and financial needs. A professional consultancy firm can act as an introducer between you and a credible yacht broker or bank to assist you in gaining the best possible marine finance solution.

For more information on maritime finance, please click on the following link to view our Marine Finance page, or to find out how we can assist you in obtaining finance, please Contact Us.

Maritime finance explained

Maritime finance is sought by individuals and business entities for a range of activities including purchasing vessels and building marine entities. The reason for seeking marine finance, the credit history of the individual, and the financial requirements that the applicant can afford to meet, will ultimately determine the type of marine finance policy they should obtain, and the financer lender they should apply to.

It is very unlikely that maritime finance can be sought for the full price of a vessel. Typically, a maritime finance lender will supply the applicant with between 60-80% of the value of the vessel. It should be noted that maritime finance is usually expected to be paid back with a specified rate of interest, whether it is fixed or variable. Most finance lenders will also require the amount of finance to be paid back within 5-15 years.

Essentially, there are two principle types of maritime finance:

  • Conventional financing
  • Standard financing

Conventional financing involves finance acquired from a banking institution. In return for the bank providing the finance, the bank will have a security interest in the vessel purchased by the individual. Standard financing on the other hand relies wholly on the applicant’s credit history combined with a down payment and a full evaluation of the vessel to be purchased.

Many banking institutions regard supplying maritime financing as extremely high risk and prefer not to engage in such lending activity, however if you have a strong credit history and good financial standing then you may be in a good position to obtain finance from a banking institution.

Typical requirements to satisfy in order to get approve for a marine finance policy include:

–          Good credit history

–          No previous criminal convictions relating to fraud or other monetary crimes

–          Good current financial standing

–          Be able to demonstrate financial position with bank statements

–          Applicant must have a certain level of monthly income to meet monthly repayments

–          Some finance lenders will require real estate or cash as a security against loss

Maritime finance cannot be acquired for; repairs and refitting, insurance, or other maritime fees, fuel or start up costs.