Here's where we shine. Marine financing leaves your other credit lines free-the boat is the collateral. We make it easy and handle all of the details. We offer personal service--just like in the old days! Get your questions answered here and start the process.

INDEX:  

1. What you don't know can hurt you!

2. Should you incorporate?

3. Are you qualified? Calculators, forms and the real inside information. (What the Brokers won't tell you!)

Download Application here.   Insta-Qualification applications... Click Here. Manual application for fax back Click Here. Word copy, fill out electronically and email back. Note: Our financial analyst, Mark has has an accounting degree and has been in the marine finance business for over 20 years. He tells us that, "...marine financing is almost counter intuitive. You would think that you should submit your application to multiple sources to get the best rate. In fact, marine financing is a very small market segment and most loan brokers use the same sources. If a broker shot-guns the application to multiple sources, this will lower your credit score and make it less likely for you to get the best terms. Our policy is to analyze the application carefully, and then submit it to the one or two most likely sources--based on our experience. This approach does not lower your score, and assures that you get the best possible terms." There is no cost or obligation for you to benefit from our experienced approach. Download the simple, one page application above and get your pre-approval so you can go forward with this important information in place. NOTE: We only accept applications for clients purchasing a boat from BYA.

 

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E-mail: First/Last:    Phone: Home Work Cell  Boat: Sail, Monohull Sail, Catamaran Power, Monohull Power, Catamaran Trawler, Monohull Fast Trawler type Brokerage Sail-Primarily Brokerage Power-Primarily Size: To 35 35-40' 41-46' 47-55' 55-66' Over 66'   Timing: ASAP 1-3 Months 3-6 Months 6-12 Months Over a year When I win the lottery!

Contact BYA live...

1-800-YACHT20 410-263-2311

Should you really buy a new boat now?

The Secrets for successful financing.

Times have never been more challenging--nor the opportunities greater.

Here are at least 10 secrets for coming out on top--get a great deal on your boat, but also get a great deal on financing.

Financing is available. Four important principals will be discussed here.

1. Why you should set up a LLC in conjunction with your boat purchase.

2. What you need to know before you submit your application.

3. Normally the loan expense is the biggest expense of boat ownership--here's a sure fire way to reduce all of your costs!

4. What you don't know, can definitely hurt you!

Please scroll down, or use the Index

Eric Smith, President

The application:

For a quick, short form to get pre-approval--use the links upper left. For a complete application if you have already committed to a boat, use the links below.

Click on the symbol to the left to get finance application, that you can fax back and get the Incorporating...information here. or from the links below.

To get a finance application that you can fill out in a word format so you can email it back, click here. (to insure privacy, don't fill in the last 4 digits of your SS number--send that info separately with only those digits in the body of your message.)

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Some definitions you can use

1. What you don't know--can hurt you!

Some of these comments may sound self-serving, but in 37 years I have seen people lose money and opportunities by not taking heed of these facts!

Q. It pays to shop around--right?

A. Surprisingly, often not. What do I mean? We recently got an approval for a client but he insisted on shopping for a better rate. What he didn't understand is that most loan Brokers use the same banks. The second application ended up going to the same bank our loan broker submitted the application to.  The second Loan Broker filled in some slightly different information on the application. Result? The bank lost trust in the client and gave him a turn down. With a turn down on his credit report, he ended up with a significantly higher rate. (On one application, there was simply a check box for "Are you a U.S. Citizen" On the other the question was asked "What is your nationality" Same information, different emphasis to the bank!

Q. At the boat show, I had offers from several Loan Brokers with a very good rate--and they said they could finance my boat even though I was putting it in charter. Is that a good deal?

A. Loan Brokers do often offer slightly better rates during boat shows. But, because of the competition they also offer various teaser rate programs. By the time you figure it all out, you're worn out and they get you as a client. Virtually none of them have a real "charter program, rate".

Q. The bank wants me to federally document the boat. Is that a good thing?A. It's required so that they can get a federally registered lien on your boat--good for them, but also good for you. (See note about setting up an LLC)

Q. I'm thinking of getting a home equity loan, or using my business line of credit. Why should I get a Marine Loan?

A. The chief advantage is that you leave your other lines of credit free for other purposes. With a Marine Loan, your boat is your collateral.

Q. Can I use any rebates I get to help reduce the Downpayment?

A. The bank will look at your liquid assets. If you have enough liquid that you could make the full downpayment without using the rebate, then they may allow you to use some portion of a rebate to reduce your downpayment--generally no more than 5-10% or so at most in today's market. The important thing is that a good dealer can feel the bank out in advance, or find the right source, to get you to a source that will work with you.

Q. Why having your dealer help you choose the financing source?

A. Many of the banks that finance boats have a public outlet and a dealer outlet. I've seen clients go to a bank and get quoted a high rate, or told that they're not qualified, and then come to us and we work with the dealer division (of the same bank--kind of the secret back door!) and with much more knowledgeable people and we get clients financed at a lower rate. A good dealer has more sources and can better match an individual clients situation with the right bank, and, he can also help integrate rebates into the equation.

Q. How can I improve my chances?

A. Enter into an actual sales agreement with a refundable deposit--these guys don't have time to waste and want to know that you're serious. Work with a dealer who will submit the application to the right funding source to start with. Cooperate, promptly with requests from the funding source. Dig out 2 years tax returns in advance and have them ready. SSee (3) are you qualified for more

Bottom line. Some dealers do get kick backs or add something to the rate you pay. This limits your choices because they only work with banks that will do this or who offer the best kick backs.

BYA doesn't do this. We simply look for the best rate and terms that fit your circumstances. Because we don't limit ourselves, we have more sources, including sources that will legitimately finance boats that will be chartered. We offer our services to help you set up an LLC and the financing simply to facilitate the sale. As a result, we're the largest dealer with the best price and service guarantee for each of the lines of boats that we sell.

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Incorporate?

2. Should you incorporate?

Whether you are setting your boat up as a business or not, there are two major advantages to incorporating:

1. Some additional liability protection. It makes it more difficult for anyone trying to get a judgment against you to get to your personal assets. In today's litigious society, you are vulnerable to everything from people walking down the dock and tripping over your dock line, to guests on board--coming after you for more than the value of your boat.
2. There may be advantages on resale. If you've paid sales tax, you can sell the stock in the Corporation, rather than the boat and the new owner may then not need to pay the tax again--this makes your boat worth more at resale. There may be other advantages if you want to get partners, etc. to just selling or exchanging stock rather than "selling your boat". (Check with appropriate tax authorities.)
3. What incorporating in a non-tax state does not do. Eliminate the requirement to pay the sales or use tax. Most states require that if you stay in the state for some period of time, even if you come from a different state, that you pay a use tax--generally the same as the sales tax (5% in MD as this is written). There are legitimate ways to avoid this use tax--but this is too big a subject to cover here. Call us if you have questions--we've written a comprehensive paper on the subject that we can make available when

A word about Federal documentation...
Generally the bank will require Federally documenting the boat (rather than state titling). The main reason for this, rather than accepting state titling, is that by Federally documenting, the bank gets a Preferred Ships Mortgage filed on it's behalf. This is an internationally recognized document where as state titles are often not even recognized from state to state.

Side benefits include:

1. Lien protection (for you, and/or the buyer of your boat at resale--this enhances resale value.)
2. Easier clearing in and out of foreign ports.
3. U.S. government protection in foreign waters.
4. Easier to sell your federally documented boat down the line because liens can be checked, and the bank for the next guy may require this.

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Get the application.

3. Are you qualified

There are a number of criteria that the bank will look at and that you can evaluate yourself in advance. Why bother? Because if you get a Turn down for any reason, it makes it much harder to go to another source.

The criteria vary, but in general:

1. You need to show liquid assets that will cover the required downpayment--generally 15-20%.
2. Good or excellent credit and a relatively high credit score. In today's climate, the requirements are more stringent.
3. You need a debt to income ratio of about 40%--including the boat payment on your debt side.
4. Proof of income--in today's tight market, we even had a doctor need to take her diploma off the wall, scan it and send it to the bank. The documentation requirements are sometimes onerous--plow through.
5. Boating experience. Helps. Don't have it, we can show that you're signed up for an ASA certified course and, believe it or not, that helps!
6. High credit card debt, low net worth, a boat to sell, high credit not at least equal to the cost of the new boat, in your current house less than 2 years, or current job, less than 2 years--are all negatives and may limit the finance choices.

What the bank will want:

Loan application. Ours in generic so that we can submit it to any source that proves to be the right source--do not fill out a specific bank application!

2 years tax returns--complete, all pages. If in business for yourself, personal and business returns.

They may ask for other documentation as things progress.

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Contact us here!  

 Bay Yacht Agency, "On the harbor, Annapolis"  Since 1972

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