Making waves: a Q&A about yacht ownership

In this Q&A, we ask Andy Blundell, Managing Director, Close Brothers Aviation & Marine, and James Crew, Marine Sales Director, a few questions about yacht ownership and the options available to those looking to purchase.

Do you have a ‘typical’ customer? 

AB: No, we provide facilities to everyone, from the longstanding experienced owner, to people who have caught the boating bug. Customers range from high-net-worth individuals and family offices who may be purchasing a 60 metre superyacht, to individuals who are looking to sail around UK waters.

JC: We work with individuals, operators and corporate businesses, and since 2007 we have become a leading provider of flexible and discreet finance for anyone seeking marine funding.

What should potential owners do before taking the plunge?

JC: Yacht ownership is a long-term commitment. While a small purchase and operation can be managed personally, larger ones quickly become more complex. As well as focusing on the management, operation and crewing, owners should invest in specialist legal, structuring and financial advice before committing to the purchase. Upfront consideration of all factors helps to mitigate any future risks during ownership.

Should prospective buyers opt for new or used craft? 

AB: We are seeing healthy activity in both parts of the market. Buyers may decide to acquire a pre-owned yacht either because of relatively attractive pricing, or because of lengthy lead times between order and delivery.

JC: Buyers also need to consider whether they want to accept it ‘as is’; pay for a refurbishment, or to design a new build from the outset.

Why would owners seek finance if they can afford one outright?

JC: Most of our yacht owners choose to finance, rather than need to finance.

Owners and their advisers recognise that liquidity is important, especially in volatile economic or political times, so applying modest leverage to a luxury asset frees up capital to operate the craft, to redeploy for investments or have a ‘war chest’ for future opportunities. 

As well as financing at purchase, we are active in refinancing unencumbered yachts and releasing equity for the reasons outlined above.

Does uncertainty, including economic, play a factor in whether to buy? 

AB: All owners have different circumstances and priorities, whether that is considering current market values, lead times or wider economic factors that have to be taken into account when weighing up whether to commit. We are keen to understand each set of specific circumstances to deliver the optimal solution for all our customers.

Are there restrictions on where someone can use their boat?

AB: We have some specific requirements, depending on its type and size, together with the size of the customer’s loan.

Customers also need to be aware of specific customs and tax requirements when planning where to buy, sail and sell their boat. Getting specialist independent advice is always recommended.

Typically, how often does someone change their boat?

JC: The ownership timeline varies considerably, but our average term is approximately four years.

We also have clients that will keep their boat for around 18 months and then change.

Alternatively we have clients that have kept them long after we have been repaid. Sometimes they are treated almost like another member of the family!

How many yachts have we funded for one customer?

JC: Charter businesses aside where we have funded multiple craft, three.

What should a prospective boat owner be aware of when purchasing?

AB: Ownership is a long term commitment, regardless of whether it’s purchased for cash or with finance. Yacht ownership is supposed to be fun for owners, so it makes sense to make sure that buyers are well equipped with as much information as possible on all aspects of ownership, to ensure happy and trouble-free sailing in the future.

And finally, are either of you sailors?

AB: I leave the real sailing to James! I have had two contrasting experiences: one was an afternoon of very calm sailing on Windemere and the other was a day on an Imoca 60 racing yacht, where we hit 30 knots in the Solent! Both were great fun and gave a fantastic insight into the sailing life.

JC: I have been sailing all of my life. My parents had a small sailing dinghy so I started young. I rarely go cruising but do race competitively. We have had the same core team for 30 years and compete in National and International Events.

I have just returned from our European Championships in Norway, finishing as the top Corinthian boat. 

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