There are many different types of finance available when purchasing a boat. Different options are more suitable to different clients. It is important to deal with an informed broker who can provide information on the different options that are available. Doing so can save you considerable time and expense.
Why Finance?
This may seem like a straight forward question, but there are many reasons why individuals and companies decide to take on debt in the purchase of a vessel through obtaining a boat loan.
Firstly, there are often tax advantages provided through the structure of interest payments and loan agreements. Check with your accountant or qualified professional as to whether there is a tax advantage available for you.
Secondly, borrowing can allow access to more capital then you would be able to access ordinarily.
Thirdly, borrowing enables you to structure the cost of purchase over a longer period of time, which is more in line with the usefulness of using the vessel.
What to look out for when choosing a finance broker..
It is important to select the right broker when purchasing a vessel. Not all brokers are the same. The strength of the broker’s relationship with different financiers directly affects not only the likelihood of loan approval, but also the time involved, and the rate available to you.
Brokers with an established relationship with a finance company are able to secure funds for you at lower rates then other brokers who do not have such a relationship. Also, they may be able to approve the loan faster, or with lower requirements of proof of income or asset holdings. This saves you time and effort, making the whole process easier for you.
Should I finance a boat through finance brokers that are affiliated with boat dealers?
There are different opinions on this topic. Essentially, a finance broker that has an established relationship with a boat dealer should, or you would hope, has expertise in financing sea vessels. As not all finance brokers have experience with financing boats, securing an experience broker is considered to be desirable.
It is important to be cautious of the commissions paid by brokers to dealers; this may mean you are at a disadvantage and could end up having to pay a higher interest rate or high fees to cover any exorbitant commissions.
The main consideration for you should be that you are getting the best possible service and dealing with a trustworthy and reliable broker that is established and has a proven track record.
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