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Program for Financing Older Boats

Just like everything else before the economic collapse, boats were easier to finance pre-2008. Today it’s a challenge to finance a boat that was built before the mid 1980’s. But things are getting better — between 2008 and earlier in 2013 it was difficult to finance a boat that was built before the early 1990’s.

There are some definitive guidelines that marine finance companies use when dealing with funding older boats. Marine lenders may fund the purchase of an older, high quality boat but not an older mid-range or lower quality boat. It may not be possible to borrow money for an older $30,000 boat, but funds would be available for an older $75,000 boat of a similar size and model. In this case it is assumed that the “higher value” boat also stands for higher quality, and will therefore stand the test of time.

The rates paid on borrowed money will depend on such qualifiers as the amount of down payment and the buyer’s credit rating. Sometimes buying an older boat takes a little more effort and there are more hoops to jump through, such as providing tax records and income statements. Also, once a boat gets to be older than 20 years, a premium is added to the cost of borrowing. So those boats that are 21 to 30 years old are more expensive to finance.

I have found that buyers are more likely to obtain loans for boats if they go to marine lending institutions rather than regular banks. The agents know boats and understand the purchasing and survey process as well as the valuation of boats better than agents at mainstream, local banks.  But sometimes if buyers have a very good relationship with their local bank their agent can get creative to help them purchase their older dream boat.

Why are older boats hard to finance?  Because purchasing a boat is not an investment in most cases.  Boats depreciate yearly; it’s the rare boat that appreciates as time goes by.  Some hold their value better than others but eventually most production boats will all go down in value.  If they are not maintained constantly their parts wear out, their systems become worn and tired and even the integrity of their fiberglass hulls can be degraded.  Boats with the highest level of maintenance are still going to depreciate but certainly a hull survey will give a higher value to a well-maintained boat over a poorly maintained one, and that helps with financing.

The difference in those high and low values are not going to be as great as many people think.  Look at it like this — a 2009 Honda Accord in great condition, with a sunroof, leather interior and a navigation system might fly off the used car lot faster than a 2009 Honda Accord with cloth interior and no extras, but they are still 2009 Honda Accords and the selling price is not going to be wildly different.  Same with boats. Good maintenance and amenities matter more to peace of mind and will help a boat sell faster (and in the higher range), but there is still a range that has to be acknowledged by buyer, seller and the finance company.

9 comments

  1. This houseboat was built in 1979 well maintained just had the hull redone as he has ever 5 years it is a nautaline 14′ × 47′ very nice boat I will have an expert boat person check out every inch of the boat. Who will loan on that year boat it’s the cheapest nice boat I could fine

  2. Looking to purchase 1977 Chris craft 41ft commander. Looking for financing for unit. Any info would be nice. Thank you. Jerry

  3. I have a 1981 37′ Island Trader Sail boat. She just went trough a four month restoration and is now in very good condition minus the mast. The two wood mast were knocked of during Hurricane Matthew. I own the boat free and clear, I am looking for a loan in the amount of 10,000, for used aluminium.

  4. I don’t see any financial institution or loan broker contact information listed for the “Program for Financing Older Boats” as this article is named. That information would be helpful.

    • Unfortunately, I don’t believe there are any. Your only hope in this case would be to find some form of equity line of crediting.

  5. i am looking for financing on a 83 Viking it is in great shape. 46 foot. can someone get in touch with me please 714-330-1679 [email protected]

  6. I am looking to buy a 1996 Formula and the loan terms I have gotten so far are a little out there. Any reasonable lenders out there for older boats? Thank you.

  7. I to am looking for financing for an older boat. it is a 1975 Morgan Out Island 51 that has been meticulously kept and maintained as part of a charter boat business. I’ve been in contact with so many institutions in the business of lending money for yachts, only to be told that they will not lend money for anything older than 1989. I have a good paying job, everything I own is paid for and not even my bank will loan money on it. Ones only hope is to find a home equity loan somewhere. But if you have a spouse who is not like minded and listed as co-owner, you’ll have no luck either because it will be required that she to sign the paperwork for the loan. This leaves you with no hope to realize your dream.

  8. I am looking to get a loan for a 105k 50′ Chris Craft in great condition. I have 50% down payment and reasonable credit. I am having a very hard time finding a lender. Even if we go 60% down payment. If you know of anyone, email or call 9545912706 [email protected]

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