Yacht Loans On the Rise – Survey Finds Surge in Boat Financing

Boat buying is on the rise, which of course means bank loans for yacht purchases is climbing as well. Respondents to a survey by the National Marine Bankers Association (NMBA) said the dollar volume for yacht loans booked in the first quarter of 2011 was up from the same period last year. The survey, conducted in April, was done to gauge changes in the lending environment and identify trends that could be used for business planning.

Asked about their outlook for the 2nd quarter, 92% indicated that they expect marine business to increase from the same period in 2010. Other responses indicate that credit quality is up and that lending criteria are mostly the same or less stringent.

All respondents reported a more positive mood among retail buyers and 75% saw increased interest in yacht and boat loans.

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A list of the yacht financing questions and responses from the survey are found below:

1. How does dollar volume of loans booked 1Q2011 compare to 1Q2010?
100% responded: volume was up

2. What % of dollar volume of loans booked 1Q2011 is on new boats?
64% responded: <26%
27% responded: 26‐50%
9% responded: >75%

3. What % of dollar volume of loans booked 1Q2011 is refinance business?
77% responded: <26%
15% responded: 26‐50%
8% responded: >75%

4. What % of new and pre‐owned purchases do you think are being financed in your market today?
23% responded: <26%
15% responded: 26‐50%
46% responded: 51‐75%
15% responded: >75%

5. What is your outlook for 2Q2011 compared to 2Q2010?
92% expect loan business to be up
8% expect loan business to be about the same

6. How does marine lending criteria 1Q2011 compare to 4Q2010?
9% stated they feel criteria is more stringent
18% less stringent
73% feel criteria is about the same

7. How does credit quality 1Q2011 compare to 4Q2010?
69% responded they believe credit quality is better
8% responded credit quality is worse
23% responded credit quality is about the same

8. Based on your company’s participation, or feedback from your dealer/loan originator clients, how would you compare 2010 winter boat shows to 2009 winter boat shows?
77% responded that retail traffic was higher
100% stated there was a more positive mood among retail buyers
75% stated there was more interest in boat loans

9. How do you feel 2010 winter boat show season compares to that of 2009 in terms of application activity?
58% responded: up
8% responded: down
33% responded: about the same

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Note: Membership in the NMBA includes financial institutions such as commercial banks, private financing firms, savings and loan companies, and credit unions. Firms extend or originate credit to consumers, retailers/dealers and manufacturers of recreational boats, yachts and marine equipment. Associate members are those which provide services to the marine lending community.

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