Sea Magazine – May 2017

CALL

206-767-0505

Today for a FREE Estimate

boatdavit.com

Firstclass Davits

Firstclass Davits from

Roskelley/Olsson

Manufacturing

combine outer beauty

with inner strength.

OUR DAVIT STYLES INCLUDE:

• Crane Boom Davits


• Manual Tilt Davits


• Stainless &
  Aluminum Transomforks

Made in the USA

Does Not Interfere with

Use of Your Swim Platform

Email for a quote: [email protected]

She’ll love

more storage.

This is the boat she’ll sayYes^ to.

FIND OUT WHY ON PAGE 85.

SEAMAGAZINE.COM MAY 2017 57

What’s the typical down-payment requirement
today?
On a loan under $100,000, you’re probably looking
at between 10 and 15 percent down. That assumes the
boat is worth the purchase price. Over $100K is in
the 15 to 20 percent range. Required down payments
are also driven to a large extent by perceived boat
valuation. New boats and used boats are usually
evaluated differently. Another consideration is a vessel
the customer now owns that is being “traded in” and
brings with it its own set of plusses and minuses from
an equity point of view. When it’s all said and done, the
lender will advance a percentage of what they deem
the boat to be worth, not always what is reported to
be the purchase price. When you get into a purchase
price of $1.5 million to $2 million or more for a boat,
lenders can require substantial equity and the amount
down can be as much as 30 percent. It’s all dictated by
the customer and how well heeled they are. The lender
would like to put out as much as they can, but they like
the feeling that they’re going to get it back.

What are the loan requirements of a borrower in

the $1 million to $3 million range?

At this level, the requirements are higher than for

the customer who wants to borrow $100K. It’s the

same principles — Credit 101 — but ramped up to

some degree. You need to have a solid credit history,

employment history, personal financial statement

with real equity, down payment, unquestionable

ability to service the debt and a strong liquidity

position after making the down payment. If you use

your entire nest egg for the down payment, you’ve

got nothing to fall back on. You would think that

anyone looking at this size of loan would already be

in tune with the concept, but occasionally I still get

surprised.

What are any downsides right now, either for

lenders or borrowers?

From the lender’s perspective the biggest downside

for quite some time is that our biggest competitor

has often become cash. Potential borrowers just can’t

The lender

would like

to put out

as much as

they can, but

they like the

feeling that

they’re going

to get it back.