Yacht Finance

Enness brokers yacht finance for global high-net-worth individuals. From smaller yachts all the way up to mega yachts, Enness has experience brokering every kind of yacht finance.

Get in touch

Yacht Finance

Enness brokers yacht finance for global high-net-worth individuals. From smaller yachts all the way up to mega yachts, Enness has experience brokering every kind of yacht finance.

Get in touch

Why Finance a Yacht?

Yachts – especially superyachts and mega yachts – are only accessible if you are a high-net-worth individual, even if you are using superyacht finance. It’s important to note that yacht financing is never about making a boat more affordable or buying on ''credit.'' The sheer sums of money needed to purchase a yacht and the risk for lenders will require that you have significant wealth and that your financial position is very strong. In other words, a yacht needs to be a highly affordable purchase for you, even if you want to finance it.

Yacht financing is usually used when you have very significant assets invested or tied up in such a way that it doesn’t make sense to liquidate them to buy your yacht. Lenders will want to be assured of this before they will even consider lending. Generally, you will need to have assets, wealth, and sources of income (properties, shares, securities, businesses, etc.) that far surpass the value of the yacht you are looking to buy for yacht finance to be an option.

The running costs of yachts vary, but they won’t come in at less than about 10% of the cost of your yacht per year, and these can be significantly higher if you have a large boat with lots of crew. Yacht financing is always about the vessel rather than these additional costs, so you will need to ensure you can comfortably cover these in addition to repayments and other running costs and loan repayments. 

Depending on your citizenship, it may also be more advantageous to finance a yacht for creditorship and personal liability reasons.

Arrange A Time To Speak
Our clients

How Does Yacht Financing Work?

The overarching principles of yacht or superyacht financing are much like a more ''normal'' loan. Your lender will release a pre-agreed sum to you that you will use to buy the vessel. You will be required to pay back the loan and interest over several years. This system is often used if you are purchasing a second-hand yacht.

If you are planning a new build, your lender will agree to release finance to you in stages. Financing commissioned yachts is marginally more complex as lenders only release funds to the shipbuilder after each part of the build is finished. Work on each stage will need to be verified (often by third-party specialists) and certificates issued against the completion of the phase before your lender will release funds. Your shipbuilder can then continue with the next stage of the build. Both you and your lender will want to consider extra financial safeguards in the case of yacht construction. Usually, these include provisions and structuring in a way that will protect you from bankruptcy or litigation against your shipbuilder that would halt the construction of a ship partway through the projects. Again, you will be required to pay back the loan and interest over several years.

While it is possible only to use the yacht as security for superyacht finance, increasingly lenders will want something in return for offering this type of loan. Yacht-only collateral is likely to be a reality for much smaller boat purchases, rather than vessels that cost multiple million pounds, i.e., superyachts and mega yachts.

Lenders will most likely want to form professional relationships to manage your personal and/or business assets in return for superyacht finance. What kind of relationship you will enter into with a lender and what you will need to put under management will generally depend on your profile, background and wealth. Also, expect to be required to sign a contract that pledges that the lender can claw back any defaulted payments from your corporate interests and personal assets if you don’t make repayments on time. Again, this means that lenders will circle back around to your ability to pay for the yacht in the first place: if you can’t – or won’t – make comprehensive contractual assurances to cover the loan, expect this type of finance to be more complicated.

Loan-to-value ratios vary from lender to lender but generally sit at around a maximum of 50%, although it can sit on either side of this, depending on your background. Generally, the more diverse and liquid your assets, the more willing lenders will be to consider financing your yacht.

Nuances Of Yacht Finance

Before considering you for superyacht finance, lenders will want to know more about your experiences with yachting. If these questions come up unexpectedly, this can seem overly intimate: professional relationships rarely venture into the details of how you spend your vacation and what kind of places you stay in. However, yacht finance is a world unto itself, and lenders will want to ensure you understand the asset you are buying and that you have a long-term interest in yacht ownership. Generally, having chartered a yacht a few times will suffice. Principally, lenders want to ensure you will enjoy the vessel you’re buying and won’t want to sell it immediately and that you have grasped the basics of operations and costs.

You will also need to think about the long-term involvement of your lender throughout your ownership of the yacht. Your lender will want to ensure that the boat (i.e., their security) remains in good condition for the loan period. They will want to do this to ensure that should you ever default on the loan, the yacht can be sold relatively quickly and that it’s in good condition at all times. Practically, this will probably mean it will need to be inspected regularly (at least once per year) by the lender, who will want to check that appropriate upkeep is being carried out and that the vessel remains in good condition.

The lenders will also have comprehensive covenants that will cover a wide array of terms that relate to the yacht, its upkeep and its use. Lenders are relatively free to stipulate these, and they will be able to set out clauses and provisions for different aspects of ownership. You will need to understand what these are, how they will affect what you can do with your yacht (i.e., the terms under which you can charter, should you lease the boat) and how it will affect the operation and regions in which you can sail. These details will affect your use of the yacht, and you will need to either negotiate these or reflect carefully on these before signing terms.

For larger, more expensive yachts, you will essentially be entering into a long-term business partnership with your lender, given you will be looking at paying back your vessel over several years. Remember that lenders will be involved and hands-on in more than just your yacht ownership: they usually require updates and at least some oversight of your finances to ensure that you remain in a solid financial position. For this reason, the lender you work with is critical to smooth, enjoyable yacht ownership. While they are subtle details, borrowing from a lender that you like, want to work with for several years, and that has offered you a fair deal is paramount to success.

Structuring Yacht Finance

Whether you are buying a superyacht second hand or commissioning a build from scratch, you will need finance to be structured in a way that meets both your financing and broader requirements. Alongside specialists and your advisors, your broker will also consider how to structure finance in a fiscally advantageous way. Enness will also consider how your package fits your other corporate and private structures.  

Yachts are rarely – if ever – owned by an individual. Instead, you will most likely hold your yacht through a corporate structure. Corporate yacht ownership is most efficient from a fiscal perspective and facilitates elements like the employment of your crew and things like how you pay VAT.

Yacht finance is, therefore, not just a simple question of taking a specialised kind of personal loan and using it to buy a yacht – there are broader and more complex elements to consider. Your ownership structure will need to be thought out and set up before lending occurs, and specialists will need to advise on the best way to structure your ownership. Enness will be able to source in principle offers for you, but lenders will need to understand your proposed structure to be able to do this.

Lenders will lend to the corporate entity that owns the yacht (and of which you are UBO) rather than you personally. However, you will generally be expected to provide a personal guarantee using your own accounts or money against the yacht to provide additional security to your lender.

Loan Agreements will be very detailed. Your nationality, plans for the boat, if it is a new build or you are buying second hand, plus where it will be registered, and the boat’s size will all affect how a lender will want to structure what you borrow. Enness will consider fiscal implications, where you live, the domicile of the corporate entity, currency, potential resale and so on. Enness handle sourcing finance and negotiating terms, but they will work alongside other experts and your advisors to deliver a yacht financing package that meets all your needs.

Enness will also ensure your finance package is ''futureproof''. For example, where your yacht will be registered will also make a difference to how finance is structured and which lenders Enness will approach. Likewise, what you do with the yacht will also come into play. If the yacht will be chartered, lenders may be more willing to let you borrow, given the vessel will generate income. In some cases, however, lenders may require that any revenue generated from charters is paid directly to them as part of your financing agreement, although this requirement may not be the same for every lender. If your yacht is used exclusively for private use, you may need to provide more security or guarantees, given it will not generate income.

Terms will also come up at the initial stages of negotiating finance. Lenders will need assurances that they can take control of the yacht if you default on your loan. Sailing to jurisdictions where it would be impossible for them to impound the boat will usually be a non-negotiable for lenders, and you will need to consider how terms like these affect your ownership and enjoyment of your vessel.

How Will Enness Organise Yacht Finance?

While it is tempting to try and emulate a similar structure or approach the same lender your associates use for their own yacht financing, doing so will not get you the best finance deal. Every aspect of yacht finance needs to be personalised, or you risk missing out on the best package. Enness will analyse every element of your background and identify how to get the best deal. This deal will be completely customised and will be dependent on what you can bring to the table, what you can offer lenders and the broader intricacies of your situation.

Enness always start by asking you questions to understand how much you want to borrow and by when, what type of yacht you want to buy or commission, your financial situation and background. Your broker will also ask about any ''non-negotiables'' you have too – these tend to centre on any specific terms you are aiming for in terms of lenders, rates and so on.

Yacht finance is complex to arrange, but it is essential to remember that you are entering into a long-term relationship with a lender. Much like a mortgage, you will be looking at paying back your loan over several years, especially if you are making a high-value yacht purchase and placing assets under management with your lender. Ensuring that you benefit from the right financing and that the deal is structured in a way that will be advantageous over several years is imperative. Having access to a choice of lenders and negotiating the deal that’s right for you is central to success.

Negotiating superyacht finance requires finesse, consummate access to specialist lenders and an ability to generate healthy competition between the different players in the space. Operating alone, it is very challenging to create the right environment to ensure you enjoy the best deal. A broker like Enness will also be able to open superyacht finance negotiations.

Regardless of how much finance you want for a superyacht purchase, this kind of specialist financing deal is a two-way street. Everything is negotiable, especially if you have a high profile or a lot of business that your lender can benefit from. Enness will open up negotiations and will be able to entice lenders to offer the best rates and terms. 

How Long Is Yacht Finance?

The length of your loan will depend on how much you want to borrow. Superyachts and mega yachts that cost several million pounds will be repaid over more years than a smaller, less expensive boat. For large vessels, terms are usually twenty years, but your broker may be able to negotiate longer or shorter terms. Smaller vessels will typically be repaid over five to seven years.

Yacht Finance Interest Rates

Interest rates are usually fixed rates, which helps to safeguard against fluctuating interest rates over the course of your loan. Interest rates vary significantly from lender to lender. Because you will benefit from a hand-crafted deal, there is no fixed rate or standard interest rate that can act as a guide.  Your wealth, profile, what income you generate and what other assets you own will all play a part, as will the size of your yacht and how much you want to borrow.

Enness will source and negotiate the very best interest rates available in the market.

Supercar Finance Interest Rates and Repayment

Enness will be able to help you borrow up to 90% of the cost of your supercar. 

As with standard vehicle financing, you can arrange for supercar loans with either fixed or variable interest rates. With a fixed-rate loan, you’ll pay the same interest for the term of the loan. You’ll also have the advantage of knowing exactly what your payments are and how much you will pay a month.

A variable rate loan is different because the interest rate will vary based on market rates. The varying rate will apply to the remainder of your loan balance as you make your monthly payments. 

The length of your supercar loan will depend on your situation, what you’ll do with the car and what your lender is comfortable with. Finance for two years is usual, but it can be much longer, depending on the cost of your supercar. Four-year loans aren’t uncommon for some of the more luxurious and expensive vehicles. 

If you wish to reduce your monthly costs, you can opt for a "balloon payment" at the end of the loan period. Balloon payments essentially postpone a large portion of the price of the supercar by making it due at the end of the loan, thus reducing your monthly charges. Balloon payments also add a kind of "safety net", especially if you wish to keep your supercar as an appreciating investment. If your car rockets in value during the loan period, the balloon payment is already locked in at the start of the loan. As a result, you can enjoy the asset's increase in value without having to pay extra for it. 

How you will repay supercar finance should always be a consideration. In traditional car financing, you simply continue to pay back your loan in monthly instalments until you have paid off what you borrow. Because supercars cost so much, this isn’t always an option. Balloon payments – as explained above – are common. Financing 50% of the car and paying 50% upfront to reduce the loan period and either removing the need for a balloon payment or significantly reducing it is another option. You can also sell the car to pay off the loan, but you will need to be aware of potential price volatility and depreciation. Lenders will want to ensure you will be able to pay off the loan even if you can’t sell your car quickly or if you have to sell the vehicle for less than you expect when the loan comes to an end.

Why Enness for Supercar Finance

The financial requirements for speciality lending are different for every individual. It can prove frustrating to present your needs and circumstances repeatedly to a range of specialist lenders. Partnering with Enness will mean you can go straight to the best sources of finance and you can partner with a broker that has deep connections in the speciality lending community. Enness’ reputation opens doors and some of the lenders your broker may approach for you may not be parties you can approach directly.

Enness will save you valuable time and make the process of sourcing supercar financing go smoothly. Your broker will help you secure the best supercar loan, no matter your background or location.

Enness has access to all the supercar finance lenders in the market. These specialist lenders are highly experienced, discreet, and used to working with high-net-worth individuals. They will introduce you to lenders that will assess your finances and background individually and can offer competitive supercar finance deals. 

Leasing a Supercar

In some instances, it may make more sense for you to lease a supercar than to use supercar finance. You’ll need to base your decision on whether to buy or lease, based on your circumstances. How you plan to use the car, and your long-term ambitions will also define whether leasing makes sense. 

You’ll find that leasing provides some advantages over financing in certain circumstances. For example, leasing is ideal if you want to change vehicles every two to three years. With a lease, you can access the latest supercars on the market continuously. At the end of the lease, you can simply hand back your vehicle and enter into a new agreement to enjoy using another car. Alternatively, you’ll also have the option to buy the vehicle and potentially sell it at a profit. In this way, it’s a cost-effective way to maintain a steady rotation of the best exotic and luxury cars available.  

As an example, you can lease a Lamborghini Huracán for around £2,000 a month. You’d typically have to make a £16,000 down payment to enter into the lease agreement. However, you would be able to enjoy a new, top of the range sports car at a relatively low entry-level: £16,000 is a small price to pay to drive the perfect supercar. In total, you may spend £88,000 over three years before you hand the car back. That’s around half of the manufacturer’s price of £170,000.

Leasing can also help you to avoid the costs of ongoing maintenance, which can be costly for supercars. As a result, a lease can lower your cost of ownership. 

Of course, leases have limitations. For example, you most likely cannot drive the vehicle more than 2,500 miles per year without incurring hefty extra mileage fees. For this reason, you’ll want to think carefully about how you will use the car and whether or not ownership is attractive to you vs leasing.

Other Considerations

Just like a mortgage, there is always a premium for supercar finance – you pay for the privilege of borrowing against advantageous terms and in a way that allows you to retain liquidity. That said, some lenders in this space can charge exorbitant prices for supercar finance, and the cost of your car will skyrocket well beyond what is a reasonable price at term. Who you borrow from and how your deal is set up is especially important in this part of the market, as is working with bonafide players who are discreet, trustworthy and operate according to certain principles.

Enness have the contacts that can meet all your needs and who can offer competitive supercar finance. These lenders may not publicise their services in traditional marketplaces and usually require an introduction from a source already known to them for some time, like Enness. Introductions are especially important at the very top end of the market or if you wish to buy a collectable, highly exotic or particularly expensive supercar: these lenders do not accept all borrowers and Enness will need to present solid reasons for why they should do so. Your broker will only negotiate with specialist lenders who are willing to personalise deals and offer financing that meets your requirements and matches your personal situation.

Contact Enness To Discuss Yacht Finance

Contact Enness To Discuss Yacht Finance

With access to more than 500 global lenders, Enness will be able to negotiate the best superyacht finance deal for you.

Contact Enness to have a no-obligation chat about your plans for purchasing a super or mega yacht and explore how Enness can help you structure and streamline yacht finance. 

Speak to a Broker now
Contact Enness To Discuss Yacht Finance
LET'S TALK NOW