Boat Finance that Works for You
Whether you’re an individual buying a boat for your own recreation or racing or a business buying a fleet of yachts for your rental or training operation, sourcing the right boat finance is critical. The right boat finance is a boat loan deal at the cheapest interest rates and structured to suit your individual requirements. To ensure you receive the boat financing, you need to understand the types of finance available in Australia and which lenders offer the best boat financing rates.
Boat Finance Types
There are different types of boat financing available for personal, ie consumer boat loans and commercial, ie business boat finance. The boat financing rates are usually lower for business finance compared with consumer boat loans. It’s also best to use a boat loans calculator for an estimate on your weekly, fortnightly or monthly repayments to check the affordability.
Personal Boat Loans
If you’re after a loan to buy a boat which will be used purely for you own private recreational use that type of boat financing comes under the category of consumer finance. There are two main types of loans available: Secured Boat Loans and Unsecured Personal Loans. We’ll summarise the key features of each so you understand the differences.
Secured Boat Loans
• This is the most popular form of boat loan and involves the lender using the boat you are purchasing as security against the loan.
• The interest rate is fixed for the loan term.
• The loan term is fixed.
• The monthly repayments are fixed.
• The borrower is permitted to make extra payments. In making extra payments, the loan term will essentially be shortened. The borrower will be paying out the loan early.
• If the loan is paid out early break fees apply.
Unsecured Personal Loans
• There can be a number of reasons why the boat being purchased cannot be offered as security against the boat finance. These include that some lenders are not willing to accept older boats as security; the borrower may be buying the boat with a group; or other reasons.
• As no security is offered, the interest rate on an unsecured loan will be higher than on a comparable secured loan.
• The boat financing rates is at a variable interest rate.
• The loan term is fixed and the monthly repayments are fixed.
• Additional payments are permitted.
• If the loan is paid out early no break fees apply.
Lenders of boat loans in Australia are required to display a Comparison Interest Rate in addition to their current interest rate in all advertisements for boat loans. On conjunction with the Comparison Interest Rate will be an explanation, detailing the specific boat loan that the rate was based on. Essentially the Comparison Interest Rate is the interest rate on a loan after all fees and charges have been accounted for. When comparing boat loan offers, consumers should take note of the Comparison Interest Rate and not solely the advertised or current interest rate offered. Low interest rate boat loans may involve higher fees and charges.
Commercial Boat Finance
For businesses purchasing boats for use in their operation or for the purchase of a boat under a company name, there are a number of commercial finance products available.
• Chattel Mortgage for Boats
• Boat Leasing
• Boat Commercial Hire Purchase (CHP)
The differences between these products are in the treatment of tax deductions, GST, depreciation, suitability for either cash or accruals accounting methods and on/off balance sheet.
The similarities are that all are usually based on fixed interest rates, have fixed loan terms, fixed monthly payments and all offer the option of a residual or balloon.
To decide which is most appropriate for your business structure, it is advised to consult your company accountant or financial advisor.
Sourcing Cheap Boat Finance
For you to positively know that you’ve found the cheapest boat loan at the lowest interest rates that works for you, you’ll need to do a lot of work. Contacting quite a few banks and finance companies, requesting quotes, possibly going through quite a significant portion of the application process just to get a quote and chances are – you still don’t have the leverage to negotiate a cheap boat finance deal.
While some banks and finance companies do offer a form of boat finance, they may not be offering the cheapest boat finance deal or a deal that works for you. Using the services of a specialist marine finance broker offers boat buyers significant benefits in source the best boat loans.
Finance broker services are available to both individuals and businesses and can be especially important if you’re sourcing boat financing with bad credit and other issues. Or you’re savvy and want to know that all the bases have been covered or uncovered, in getting the best and cheapest boat loan.
When selecting a finance broker, ensure they are:
• Experienced in marine finance with specialist expertise and knowledge in the boat loan market.
• Independent. Not associated with any bank or financial institution. This is your assurance your broker is working in your best interests and only your best interests.
• Accredited with a large number of banks and lenders, including industry-only and specialist marine finance sources. This ensures that your broker has access to a large number of sources and all the options have been covered in sourcing your boat loan quote.
• Boat financing bad credit experience. If you have no docs low docs or other credit issues, you will want a broker that has the expertise and the understanding to source you a boat loan that works for you.
• Fully licensed in Australia with the relevant authorities and regulators.
Boat Finance Broker Services
A specialist marine finance broker provides a range of professional services to both businesses seeking a workable commercial marine finance deals and individuals seeking the cheapest boat loan.
• Source the cheapest boat finance quote from their large lender panel.
• Utilise their industry-only and marine-specific lender sources.
• Use their bargaining power and professional negotiating skills to get you the cheapest boat loan interest rates and loan terms and conditions that work for you.
• Arrange pre-approved boat finance.
• Find solutions for no docs and low docs boat loans.
• Assist with the paperwork, liaise with the lender throughout the process and assist with other aspects including seller and boat checks.
• Save you time, save your hassle and save you money!
For a boat financing that works for you, your business and your boat purchase at the cheapest boat financing rates, using a specialist marine finance broker works!
We know people that operate in this area and can provide you with their details. Contact us for more information.