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Everyone knows that acquiring a boat represents a significant financial investment. The price will vary depending on characteristics such as the length, whether it is a sail or motor yacht, and if it is new or used; however, whatever boat you desire, its purchase will be a substantial expense in your life.
However, you should keep in mind that just as there are loans designed to finance education or buy a car, there are also different types of financing that can be tailored to the type of boat you are interested in, its age, and the initial purchase amount.
So, if you want to buy a boat but don't have all the necessary money, look for the financing option that best suits your needs, and you can get the boat you want.
Before choosing a financing option, you should evaluate the various advantages each one offers for your particular case. Therefore, in this article, we will analyze the different boat financing options so you can choose the one that best suits your needs.
Nautical Mortgage
A nautical or naval mortgage is a financing system that works similarly to mortgages for purchasing a home or commercial property.
In this type of financing, the financial company provides a fixed amount to the customer to complete the purchase. The buyer, in return, offers a guarantee to the financial institution in case of loan default. This guarantee can be the boat itself or any other property previously agreed upon between the financial company and the customer. If the buyer defaults, the institution would execute the mortgage on the agreed asset.
The nautical mortgage system allows financing up to 75% of the boat's appraised value. The maximum term is 15 years, and the reference interest rate is the Euribor, although it usually has a higher differential than home mortgages.
This financing system is most commonly used for purchasing commercial, fishing, or working boats.
The advantage of this type of financing is that, since there is a guarantee, the interest rates are lower than other methods. However, the main drawback is the high costs of notary fees, appraisals, registration, and opening and cancellation commissions.
Nautical Credit
Another way to finance the purchase of a boat is to negotiate a personal loan or credit with the financial company.
In this financing system, the customer who wants to acquire a boat requests money from the financial institution, and the institution grants it based on the borrower's personal guarantee.
With nautical credit, you can obtain a loan for 100% of the purchase price, allowing the customer to finance the entire purchase without the 75% limit imposed by the nautical mortgage.
Another advantage of personal or nautical credit is that it involves fewer administrative costs, such as management fees, notary fees, appraisals, or registration. The transaction can be done through a private contract with a simple registration certificate, depending on the loan amount and the boat's characteristics. However, the main disadvantage is that personal loan interest rates are usually higher than mortgage rates.
The main users of this product are buyers of new recreational boats for rental or charter use and individuals purchasing used boats.
Nautical Leasing
Another form of nautical financing is nautical leasing. This model is increasingly popular among individual buyers and nautical companies, especially due to the favorable tax benefits it offers. In fact, it is the predominant financing method for boats in Italy, France, and Portugal. Nautical leasing is a long-term rental contract with an option to buy. Essentially, a company purchases a boat that is leased to the final customer for a specified period (usually between 4 and 15 years).
Payments are made monthly, and at the end of the agreed term, the user can typically exercise the purchase option and acquire the boat in full by paying the residual value specified in the contract.
Spanish leasing allows the VAT and part of the boat's value to be paid in installments, with an initial down payment of approximately 30%.
There are two other types of leasing in the market: French and Italian leasing. These methods are similar to Spanish leasing but are formalized with a French or Italian bank and have different terms and minimum values. The main advantage of these contracts is benefiting from a more favorable VAT regime if certain requirements are met.
The advantage of this leasing method is that the customer has the possibility to buy the boat later, so it is not necessary to immobilize a considerable amount of capital to enjoy the boat. Additionally, there are certain tax advantages derived from navigation in non-EU waters, as well as the possibility of transferring the financing.
Conclusion
In any case, financing your boat is something you should evaluate over time, carefully analyzing all options. Ideally, consult with an advisor who can determine the best financing method for the type of boat you want to buy, its intended use, the navigation area, etc. If you are thinking of acquiring a boat and need advice on financing, contact SYSFINANCE, and we will help you select the best financial option based on your circumstances and possibilities.
