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Funding for boats seen inching up

If funding for boat loans is inching up, it’s good evidence that the “bottom” is clearly behind us. Such is a conclusion from the encouraging news out of the National Marine Bankers Association last week. 

According to NMBA, reports from the industry’s just-completed fall boat show circuit (which wrapped-up Sunday night in St. Petersburg, Fla.) suggest buyers are more prevalent and loans are more available. Qualifying for a new boat loan, or refinance on a current craft, is still demanding but interest rates are reasonable (reportedly 6 percent-9 percent) and marine lenders are actively competing for new customers again.

Tom Mack, South Shore Marine (Huron, Ohio) generally agrees. “We’ve seen fewer deals turned down,” he noted. “Although I must add we have very frank conversations with our buyers. For example, we make it clear if they have negative equity in a trade, the only thing that will cure that is their checkbook. We also push for 20 percent down. So, we do a lot of credit app pre-screening and it’s serving us well.”

The picture is less encouraging on the West Coast, according to Dave Geoffrey, president of the Southern California Marine Association . “For the most part, our dealers have not seen improvement in lending this year,” he said. “Where money may have been too loose before the crash, the pendulum swung too far the other way. Now, to see any lending improvement, loan criteria must move back to the center.”

“Last January or so, we seemed to move up from ‘frozen stiff’ to ‘big chill,’” says Joe Lewis at Mount Dora Boating Center (Fla.). “Since then, we haven’t seen much change. For example, we always send our deals first to our big lender but when they’ve rejected a good deal we’ve seen local banks accept them. Still, the NMBA report is good.”

Speaking of smaller community banks, it appears some have recruited marine loan specialists who were let go by the larger banks when they bailed out of marine lending. In these cases, some smaller banks have become aggressive in building they’re marine portfolio. NMBA has been active in educating community banks about the value of boat loans, apparently with some success. “Yes, we are seeing that happening here in Ohio,” confirms Mack.

According to Scott Anderson from Merrick Lending in South Jordan, Utah, “There have been easier days to get a boat loan, but there have also been more difficult times. I believe the boat loan market is heading in the right direction though. Rates are very competitive right now and I believe will continue to be through 2011. Availability is good for those who can verify income, provide down payments and have been able to put any credit problems behind them.”

NMBA is convinced a new base will be established with high quality credit customers initially, then extending offerings to a wider slice of the populace as the economy – and interest rates – gain steam. Certain bank economists see these gains coming in 2011. While it’s unlikely credit will ever be as “cheap or easy” as prior to the financial meltdown in ‘08, loans for boats will move back into a preferred category reflecting historically strong borrower demographics and credit profiles. That’s good news!

For more information about marine lending, I suggest you go to the NMBA website:


3 comments on “Funding for boats seen inching up

  1. Arch

    I”m not trying to be negative here but I”LL PROVE THAT THIS IS SIMPLE NOT TRUE.

    1- NMBA and Merrick are trying to be positive, but there are NO NEW LENDERS in the business. Some community banks and credit unions do boatloans and have for years, but there are no new national sources.
    2- The CA marine association is right. Except for a rare exception, getting a loan in CA is no different than in FL, NY, TX, or any other state. So it’s impossible for the boat loan business to be good in one place and bad in CA.
    3- It’s totally disingenous to imply that the lenders have made it easier for applicants to qualify. This is more embellishment on the part of industry reps. It’s no better or worse than a year ago. TOM MACK and JOE LEWIS are right. It seems better because we are better in prequalifying our customers and getting expectations down in line with reality.
    4- THat last paragragh is probably somewhat true, but the rest is full of fluff. But I realize it’s their job to be OPTIMISTIC, pro-industry, and politically correct.

  2. DJ IN NC

    The bottom line parallels the RV market: 10%APR except for the very best credit worthy customers and 20% down.

    No rocket science with this statement:

    Availability is good for those who can verify income, provide down payments and have been able to put any credit problems behind them.”

  3. Ken Lamain

    We like to tell people that the banks are lending money to the people they should have lent money to in the past. I well remember writing loans in the late 80’s for 12 1/2 % variable rate for 180 months with no money down. Some of those people still can’t trade thier boat. We are thankful for regional lenders. Some national guys tend to run too hot and cold. For the first time it does matter where you live. Even Medallion Bank has pulled out of Michigan all together. We are in it full time if you need a hand.

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