Yachts can cost tens or hundreds of millions of dollars, so it’s no surprise that many people require financing. In Europe, financing schemes such as leasing, credit, bail loan, and construction contract financing are common. Large international financial organizations usually undertake only projects with a cost of at least ten million euros, but smaller cases associated with a small number of banks show high statistics.
Yacht Secured Loan
A loan secured by a yacht is a typical financing transaction. The yacht to be purchased and mortgaged must not be older than five years and must have all the necessary documents, such as licenses, certificates, and inspections. The client’s condition must be 5-10 times larger than the loan amount, and the loan is usually granted for no more than ten years, up to 75% of the value of the yacht. The contract can be concluded by both natural and legal persons.
Yacht leasing is a popular option for future yacht owners who want a long-term lease with the right to purchase later. The French and Italian leasing schemes are the most popular in Europe. It involves a first deposit from 20 to 50%, terms up to ten years, and the annual VAT rate is from 6 to 19%. Leasing can be used by both individuals and companies, and it is possible to buy new yachts or used ones. At the time of the transaction, the yacht must be in French or Italian waters, depending on the type of lease.
Yacht lending without collateral is also practiced in Europe, but it is difficult to use this service for those who do not have EU citizenship. With the help of experienced lawyers, it is possible to obtain a loan, but it will be granted subject to certain requirements. The cost of the yacht should be more than one million euros, the age of the vessel is no more than three years, and the loan rates average 5-7% per annum. The contract may include an assignment from commercial activities, corporate or other guarantees.
When building a yacht from scratch, financing options are also available. The client assumes part of the financing and pays the first installment, equal to 30-40% of the yacht’s value. Competent lawyers will help to select a shipyard, create a construction plan, determine the purpose, type, model, and design of the future vessel.
Regardless of the financing scheme selected, primary attention is paid to the legal aspects of the implementation and assessment of the client’s solvency. With the help of experienced lawyers, it is possible to determine the financing scheme, choose a reliable bank, collect and correctly submit a package of documents, and conduct an independent selective examination of the vessel. They can also provide comprehensive legal support throughout the process.