Marine Finance - Shock Horror

[Hughie]

Just applied to Lombard for Marine Mortgage - only wanted 50% against 29K and was turned down! Never been turned down for finance in past and no defaults etc etc. When I asked for reason they were evasive to say the least and will not reconsider. Have applied for credit file etc etc., but I'd be surprised if there was anything on there to worry about, although I am self employed (with accounts).

The boat was a Searay Sundancer 270 at what I would have thought was a good price for a 1996 boat. We've always paid cash for boats in past so no experience of marine finance.

Perhaps Lombard are fussy about self employed applicants? I notice most brokers seem to push Bank of Scotland - are they less fussy? Has anyone else had similar experiences?

 

[tr7v8]

Mines with Barclays Marine Finance, try Rob on 0777 5551383. I'm a contractor, looking for £ 15K and I had a yes in 2 1/2 hours.
This is Finance not a mortgage but they seemed flexible and it was a good rate (9.6%)

Jim
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[byron]

Never financed anything so don't know the rules. I did however try to open a bank a/c last week with First Direct and was turned down on the basis of a dodgy credit report, I applied to the Credit Reference Agency for a copy of what they had provided, got it, cannot see anything there detrimental so I rang First Direct to see what they were concerned about, they spluttered a bit and said that if I would like to re-apply they would re-consider... I politely told them to get knotted.

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[nautigirl]

<no experience of marine finance>

This could be the problem, unless you have an established credit history elsewhere. No credit record seems to be as bad as a poor credit record

 

[byron]

There was loads of info on me there although they had missed the 6 pence I loaned Cliff Richard in the Two 'I's cafe in 1959 and never got back.

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[hlb]

Once got fed up with Barclays, so went to Natwest and asked if I could put a load of dosh in. No she said, You have to make an appointment with Bank manager and he's not in. But I dont want any money I said. Just give you some. Sorry she said. So still with Barclays!!

<font color=red> No one can force me to come here-----------
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Haydn

 

[qsiv]

I'm self employed (within my own company), and I certainly had no trouble with funding from RBS - but the business account has been with them for 20 years as have my private accounts. I'm sure it helped, particularly as the amount required main board approval, but even so I had a provisional yes within 24 hours

 

[tripleace]

cheapest finance is to add to existing home mortgage. ask for seperate account (which you will get like it or not) and pay the boat money loan back at the rate that applies for a loan over say 5 or 10 year or whatever you want.

If you need to get comparison on household rates & the commission that brokers get then go to

mortgage calculator

<A target="_blank" HREF=http://www.boating-ads.co.uk/365.html> Triple Ace Link</A>

 

[jfm]

Re: too small

It might have been too small. You said 50% against 29k, in which case you were borrowing 14.5k, right? I think that's too small for them to consider a full blown mortgage but quite a lot for straight unsecured credit, as far as they see it. So praps borrow more or just add 14.5k to your house mortgage, as others have suggested. For house mortgages by the way, you will find Bank of Scotland an excellent bank imho !!

 

[david_steward]

I arrange commercial finance for a living and I am on my second marine mortgage with Lombard. We are looking to upgrade our boat so made an application at the boat show.

No thanks they replied, you have only been trading as a ltd company two years. But I have been a customer of yours for four years, and I have been paying my existing mortgage for the last two years using my income from this newly formed ltd co.

Still no thanks, and my credit search is spotless.

Some of the finance companies I deal with would rather see some slightly shaky credit history than none at all. Very strange. Others seem to get very tied up with whether you appear on the voters roll or not.

Barclays said yes please to me within 3 hours, so Lombard can go shove it.




Please insert your smart ass pretentious tag line here...


Dave S

 

[Hughie]

Whilst I would no doubt be able to add to my mortage, I would prefer to leave the equity where it is just in case one day I need security for business based borrowing. I appreciate that being self employed, unsecured borrowing is often difficult, but was surprised more by Lombard's refusal to even qualify their decision. I am also now informed that if I start shopping around for finance, even this will work against me! If there are any yacht brokers/dealers out there reading this - why do you all seem to push Bank Of Scotland - commission or fair play?

Perhaps I'll try Barclays next as it seems they might be less fussy - my concern of course is how multiple applications will start to look on my credit record!

I am particularly miffed because anyone looking at my accounts (if they understood what they were looking at) could see that I can easily afford the repayments. They can't even say we might no be able to afford the running costs, as we've been running our last boat (33 ft Aquabell) for years and only sold it a few months ago!

Thanks for input
Hugh

 

[ianphillips]

Ramsgate

Sorry to butt in - know nothing about finance, but note you berth your boat at Ramsgate. Do you know a boat by the name of "Vamp," an Aquabell 33. We sold her last year to a family who I believe was relocating her to your part of the world. We often wonder how they are getting on together!

 

[TwoStroke]

Credit Search

From my experience dealing with finance houses direct, it can depend on the underwriter and the finance targets they are set. If they are behind on their finance target the more lenient they become (to a point).

With regards to credit search - an underwriter (IMHO) is not overly concerned if they see a few of them. It only causes them worry if there is a large spate of them in a very short time span. Usually the reason is brought to life when they do the credit check.

I would try a different funder.

Hope this helps.

... I want to be back on the water!

 

[Dallas]

It's all down to Credit Scoring. Lombard traditionally has higher expectations when it comes to scoring than say, Barclays or RBS.

For example Equifax or Experion (the 2 leading credit reference agencies) whom most of the finance houses get their credit scores from both get their information from different sources and at different times. Therefore, your credit score from one can be completely different to the other. Stupid, I know but that’s the way it is.

I am self employed and three years ago I applied to Capital Bank's marine division for a £40,000 mortgage on a boat valued (by the surveyor) at £120,000 - they said no. I approached Lombard who said yes but the interest rate would have to be an extra 1% - I said no. Went to Barclays who asked for my last three years accounts. I bet the fax had not finished coming through on their side and the phone rang to say yes, when do you need the money.

When a finance company says no, try to negotiate a higher interest rate because then it’s not so much of a risk for them. They get their initial capital back slightly quicker and sometimes will look more favourably on a borderline case.

One final thing to bear in mind is that the more companies you apply to the lower your credit score gets. Apparently every time you apply it is noted on your file and your credit score is reduced – only slightly, but reduced non the less.


Dallas

 

[david_e]

The credit scoring view is sound, but this is a specialist market and as such requires specialist knowledge of the market and it's risks. They have to have this to get the business from the brokers and from the public direct. The equity alone should be enough to get the score required so maybe it is the amount, but only being £500 quid short one might expect them to let him know. It could be the boat and it's price but that it is a long shot. Only other thing could be that they have met their lending targets for the year and they are just being ultra picky, in which case they might put the rate up, but as you indicate this likley to attract a worse risk because the better risks tend to go with the lower rates.

If the underwriters have got it wrong in the past, and are now tight in response, there should be lots of repossesions on the market reflecting their past follies. Not sure about powerboats, but there aren't with yachts, so maybe they know something special that we don't.

 

[c_j]

I applied to Lombard for a loan mortgage on a 150k boat and although I was able to show them accounts with multi million asset value they declined because I had failed to make any money in that year (by design). They said show us your Bank Statements, and I said go and.........................

Any way, there is a happy ending. I have used for many years for Plant and equipment purchase Clydesdale Asset Finance and I financed my boat with them although they had no marine expertise. This has all changed and they have recently moved into the Marine finance business. I was lucky enough to be asked to accompany them to the boat show to give them a bit more insight into the industry and make a few introductions.

I would be happy to give you a contact number if you PM or email me.

It may be true that the balance may be on the low side as has already been said, but nothing ventured.

There are those who say put it on the morgage but it depends on the rate and your requirements.

The rate I was offered reflected the years I have done business with them but believe me they will be competitive.

CJ
chris@stone.uk.com

www.stone.uk.com

 

[chas]

I was refused finance once about five years ago. After much kerfuffffle, it transpired that the reason was that I had recently moved and the previous person living at my address had a lousy rating. There was no problem once this had been cleared up.

 

[SteveT]

I went to Lombard and was refused because the amount i wanted to borrow (15k) was to be used as the deposit and the boat would not be delivered until June they said they could not lend it becuse if I was to default between now and then they would have nothing to claim back against.Anyway i then went to Cahoot got a five year loan at 7% no hassle no questions as to what it was for and a darn site cheaper. I can pay off early without penalty or as the loan goes down re borrow the money just as long as it is paid off within the five years.
give them a try

ONLY DOWNSIDE IS THE MAXIMUM AMOUT TO BORROW IS 15K (UNSECURED)

 

[david_e]

Re: convert to even lower 0%

good idea, i did this when moving out of a company car scheme and wanted to buy the car. and now that you have your loan, you can transfer 90% of the balance to other cards that offer 6 months 0% and keep moving it around every 5 months as a new offer comes up until it is paid of. just leave a nominal 10% with cahoot for safety reasons. just about to transfer mine to sainsbury's card, no need to take out a new one as it is already there.

 

[Hughie]

The general concensus seems that Lombard don't like lending money - perhaps they are in the wrong game!

Anyway, thanks all for advice. Seems Barclays are happy to lend to us, but rate is slightly higher. Bank of Scotland have quoted a lower rate, but subject to credit search etc., which they say may influence the rate they offer, either way.

As for the unsecured route - I did look at this, but it seems it would be rare for companies to agree to lend this sort of money without security to a self employed, particularly in my case, as although I have some business borrowing, it appears absolutely nowhere on my credit file which I received through the post this morning. Therefore apart from a credit card, which gets paid off every other month or so, it looks as though I have virtually no credit history at all.

All best