BOAT FINANCING

[SONNY494]

I am a US citizen looking to purchase a charter boat with THE MOORINGS in Turkey. I was wondering if anyone has info on any financing companies able to "float " a loan/mortgage to us while the boat is in charter service (Gocek, Turkey)? The vessel will be a US Corportation and USCG documented.

Thank you in advance for any help.
Sonny

 

[Tranona]

When we bought our charter boat in Greece, we financed by extending the mortgage on our house. Much cheaper than marine finance and no charge on the boat. I expect Moorings will have a tame in house marine mortgage company, or they may have a finance scheme of their own. I bought my boat through Kiriacoulis, the Bavaria agent in Greece who is also a big charter operator and they could have arranged finance if I had wanted it. If you do finance against the security of the boat, expect to pay at least 4 percentage points above base rate. You may also need to consider the currency issue. I expect you will have to pay for the boat in Euros, and if there is an income element in your contract it will also be in Euros. Therefore makes sense to have the loan in the same currency, even though the %age rate is lower if you borrow in US$. Good practice to match the loan with the income currency, otherwise you are exposed to currency risk.

You need also to check that a US registered boat can legally charter in Turkey. It would not be possible in Greece.

Complex subject. Hope this moves you on a bit.

 

[SONNY494]

The Moorings does have connections for lending institutions; but they won't cover US citizens and boats owned by them or their US Corportations for boats in the MED. I was under the impression that it is OK in Turkey and I was aware that you had to be a national in Greece, in order to charter. I was toying with the idea of having it set up with a partner who is a Greek National. I had one gentleman in mind, and he also was a manager in one of the bases. I gave that up and decided to go with a boat in Turkey. I have met numerous idividuals while on a charter in Turkey who are from GB; but they didn't have a problem setting up the loans and chartering.

Sonny

 

[Tranona]

If your aim is to have a boat in the Med that earns its keep through chartering but allows you to use it then there are many operators who will offer you deals of varying sorts. In Greece the boat has to be for practical rather than legal reasons owned by a Greek firm and on the Register as a charter yacht. You then do not have to pay VAT on the boat. The normal arrangement is that you have a contract with the Greek company to deliver the boat to you when the agreement expires, usually 4 or 6 seasons. You then pay the VAT on the written down value if you want to keep it in the EU or export it, say to Turkey or Croatia. As a non-EU citizen there are valuable concessions to avaoid paying VAT that are not available to EU citizens. You can raise finance against such a contract, but the lender will probably want to have a charge registered against the boat with the Greek registry.

You are right, I think in saying that in Turkey there are less restrictions. We once chartered a boat through Sunsail and it was under French flag, but that was partly because of a French government scheme that provided tax relief on French owned charter boats.

The major UK operator in Turkey is Top Yacht and they manage owners boats. I think most of the owners are from UK and the boats are on the UK register. Whether they will handle a US registered boat I don't know, but worth an enquiry www.top-yacht.com You, of course won't be able to register the boat in the UK as you are neither a citizen nor resident.

You may still have a problem financing as the income may not cover the loan interest and your lender may not like the security (or lack of!) but worth investigating.

 

[SONNY494]

Thanks for your response.

Sonny

 

[Leecj]

To confirm we (Top Yacht) only bring new yachts into the fleet - British flagged and MCA coded etc. We do have foreign owners though - drop a line to chris@top-yacht.com An alternative well worth considering is to purchase one of our previously owned yachts, some of which can remain in charter to provide income to help offset running costs. Not sure re ins and outs of financing but I can't see why a US mortgage can't be raised?