I don’t know if you have noticed, but credit is a big deal recently 🙂
As the mortgage industry has been going through significant problems and the credit industry is in a mild (or more than mild) state of upheaval, boaters, and especially boat buyers, are being affected also. Buying a boat is a large investment… possibly as large or even larger than your home.
Most of us, if we’re looking to buy a boat, are going to be shopping for a loan. Some people have the wherewithal to cover these expenses, or already have financial advisors and institutions that they work with for large expenditures. For those of us purchasing smaller craft, we fall back to the same types of financial arrangements that we are used to dealing with… the local bank and credit union.
Be aware that there is another option… the specialist boat loan originator.
I recently had the opportunity to interview Ed Brozek, one of the partners in Oak Hill Financial, a Maine based company that specializes in boat loans. Just for “truth in writing”, Mr. Brozek is using one of my articles on his web site, but I have no financial stake in his company.
I enjoyed chatting with Ed… this is a man who loves boats and knows what it is to deal with boat people.
Ed has been in the boat financing business since 1984 when a friend helped get him started. Starting as an Air Force instructor pilot, then as a metalurgical engineer, Ed has moved through more major careers than most of us manage in a lifetime. Somewhere along the way he dealt with collectible cars also. Busy man!
Oak Hill Financial occasionally helps with aircraft and RV financing, but boats are their thing. Ed and his partner are proud to run a small, personal service company. This is an outfit where the phone will be answered by a human… usually Ed or his partner. They will be happy to help you through the process of getting a loan, including the required paperwork, Coast Guard documentation, etc. They have various banks that they deal with to give you options for various situations.
I asked Ed why he specializes in boat loans… and got the answer I kind of expected – he’s a boater. The downside of his business is that he had more time to go boating before he got so busy helping others live their dreams. Oak Hill’s main customers are individuals. They find customers through their web site, repeat customers and referrals. Often people refer their family to him after being happy with the Oak Hill personal service. Ed says that he finds it very gratifying – you can get the same percentage rates other places, but not the level of service.
Oak Hill is happy to work with you nationwide (in the US). They have the ability to work with overseas delivery situations of new yachts being shipped to the US, but otherwise they are US based due to banking laws and regulations. The time it takes to get a loan is usually constrained by outside requirements. Actual loan approval usually takes about a day. For a used boat a survey will nearly always be required, and that is going to be the biggest delay. Lien searches and any required Coast Guard paperwork also fit in there, but can usually be done while waiting on the survey. Ed has closed as soon as the same day when dealing with a new, smaller boat… now that’s service!
I was interested to learn what Oak Hill’s “average” boat loan was for. Popular boating magazines and publications will lead you to believe that the million+ dollar boat is the norm. Maybe it is in some circles, but there are still lots of us work-a-day folks who want to buy a boat and be able to eat. Ed says their average is in the 30-40′ range, probably $80,000 or so for the loan amount. His largest was a 1.6 million sportfish, but that was the exception. The majority of their business is the individual buying a boat for the family.
Boat loans are slightly different than what you may be used to when buying other vehicles. Loans are available for boats as old as 30 years. Fiberglass hulls are preferred by the banks, who seem to feel that they will last a long time with little maintenance. Wooden hulled boats are very difficult to get loans for… sometimes a local bank might help a local resident. Wooden hulls are also harder to insure. For whatever reason Ed has also found steel hulls harder to get loans for. Banks also aren’t interested in fixer-uppers – remember, they are looking for collateral.
Liveaboard’s, depending on their situation, can be done. Not all banks are interested, but he has some sources. A lot depends on the borrower… a retired couple with a pension probably will work… a young struggling single guy is going to have a hard time of it. As with anything, if you don’t need the money, you can get it.
Boat loan rates are fairly attractive. As of this writing, a little below 7% for larger amounts, with it inching up to 8% or so for smaller amounts. Terms can range from 15 years for $25,000 to 20 years for greater than $75,000. That works to be a payment around $580/month. Not as bad as I would have thought.
I haven’t done business with Ed, but after chatting with him for a while, I would definitely explore the possibility if and when the time comes. If nothing else, maybe I can stop by and visit if I ever get to the boatbuilding world of Maine. Ed even mentioned how high-tech boatbuilding in Maine is getting, with a new high-tech boatbuilding school looking to open. Sounds like something else for us builders/dreamers to check out.
Thanks Ed for your time!