How marine lending works, what lenders look at, and when to arrange it.
Who lends
Specialist marine finance desks within private banks and a small number of dedicated yacht lenders. It is a relationship-led market: most lending is done alongside a wider private banking relationship, and the yacht is one asset within it. Ordinary commercial lenders rarely take yacht security.
What lenders look at
The yacht — builder, age, condition, survey and valuation, flag and registry, and whether she is commercially registered. The borrower — income, wealth, jurisdiction and existing relationship. And the structure — the owning entity, where the mortgage can be registered, insurance assignment and management arrangements.
- Independent valuation and condition survey
- Builder, age and resale liquidity of the model
- Flag and registry acceptability for mortgage registration
- Ownership structure and guarantees
- Insurance assignment and management arrangements
- Borrower's wider financial position
Terms
Advance rates, tenor, amortisation and pricing vary by lender, yacht and borrower, and there is no standard offer. Expect covenants: maintained insurance with the lender's interest noted, an acceptable flag, agreed management, valuation rights, cruising restrictions and restrictions on chartering. Read the covenants as carefully as the rate.
New build finance
Financing a yacht under construction is a different exercise: stage payments against construction milestones, refund guarantees from the yard, and security over an asset that does not yet exist. It requires a lender who does this regularly.
Arrange it early
Approach lenders before making an offer. Finance takes weeks, valuation and survey feed directly into it, and an offer subject to finance that cannot be delivered damages the buyer's position. Advice on structure and tax must come from your own advisers.
Questions
- Can older yachts be financed?
- Sometimes, on more conservative terms. Age is one of the main constraints in marine lending.
- Should I arrange finance before viewing yachts?
- At least in principle. Lender appetite and indicative terms shape the budget and strengthen an offer.
This guide is general information about how the yacht market conventionally works. It is not legal, tax, financial or insurance advice, and it does not describe the terms of any specific yacht. Qualified advisers should be engaged on anything material, and rates, prices, availability and access are confirmed in writing before anything is committed.