Freshly back from the regional boat show Interboot at the Lake of Constance I did have some very interesting conversations with people again who are – as they state it – “shortly before acquiring” a yacht. Well, that´s something you hear very often and there´s no guarantee that all those people will acquire a yacht in the near future, but talking to them brought me to an interesting question: Which different possibilities of acquiring a yacht are there really? First, there´s the classic way: As my parents taught me “if you ain´t afford it, don´t buy it!”. So, if you take me for example, I simply couldn´t afford the staggering sum of 150 to 300 thousand Euros, so I went for a small, used boat. My SY OLIVIA is my treasure for sure. This has many advantages over buying a newly built boat (read it here), but … well … it´s still a 45 year old used boat. So, do I really have to take this road? Well, not really. Here´s another one …
Sabine Schubert is well known in the German scene of yachting. As many people from the business point out, she is not only a very clever and funny person to spend time with, she is “the woman with the money”, as people call her: Sabine Schubert works for SGB Finance. As she puts it by herself, she is helping people to acquire their dream yacht by way of financing the yacht and helping out with different models of making a full price brand new yacht affordable. I was happy to meet her during Interboot boat show again and for the fact that she took her time to give an insight into the second way of buying a yacht: By simply financing the yacht with a bank´s help.
Lars Reisberg | NO FRILLS SAILING.com: “Sabine, good to have you here again. Thanks for taking your time to sit down and answer some questions on yacht financing. First of all let me ask a kind of provocative question: Most people are reluctant when it comes to financing a yacht with a loan or credit as this is considered sort of a don´t-do-it. What would be your argument against this thinking?”
Sabine Schubert | SGB Finance: “Well, frankly, I always put it this way: There are no pockets in a shroud. You are young and capable of doing things now, you want to see the world now, you can go out and do it now – you need your boat now. It´s more like a motto how you look at life, kind of “live now!”-attitude. And simple enough, with a financing solution you can acquire your yacht now and leave for whatever adventure there is in your mind. Go out and get it – if you can service the debt, then what´s to wait for?”
NFS.com: “So that´s a classic go before you are too old-thing basically?”
Sabine: “Yes, most people think that way. But there are also other factors you should consider: A lot of people do finance their yacht via banks although they could buy it at once …”
NFS.com: “… they have the money but choose to get a loan?”
Sabine: “Yes, they do. That´s because if you do so, you save a lot of money to sustain liquidity. You do not invest all your assets at once into the yacht. The then “saved” ressources can be invested otherwise or used for equipment or other stuff. Let me point to an interesting factor: As a German your reference to this reluctance towards banking and loans is typical German. For example, in France this is completely different: Some 95 per cent of all new yachts in France are financed by loans.”
NFS.com: “This is interesting. So when talking about financing a yacht, is it just a credit classic loan?”
Sabine: “Basically in Europe we have two different models of financing a new boat: The classic loan and a thing called “French Leasing”. The loan can be used to finance a new yacht as well as used boats of up to 10 years, which is very interesting for first-buyers. The French Leasing finances solely newly built yachts, no used boats.”
NFS.com: “You are working for SGB Finance. This is the bank behind all this?”
Sabine: “Yes it is. SGB is a joint venture of Beneteau Group and Societe Generale Bank. The important thing about SGB finance is that we are especially and 100 per cent dedicated to yacht financing. We don´t do anything else. Our specialty is financing yachts, that´s a difference to ordinary banks …”
NFS.com: “… in which matter?”
Sabine: “Well, for SGB the boat itself is the bank collateral. That´s the difference to normal banks which would always take something else as collaterals, like your house or something. For us it´s the boat.”
NFS.com: “So my ordinary main bank wouldn´t grant a loan for a new boat?”
Sabine: “Normally they indeed won´t because a yacht is not something they usually deal with. They simply don´t know what to do with a collateral like a yacht in case something happens. With a house, there´s no problem, but normal banks usually do not finance a yacht. If they do, I would suppose that their interest rates will be accordingly high.”
NFS.com: “So it´s better to go to the specialist, like SGB.”
Sabine: “Yes, or CGI, which is another bank in this matter specialized on financing yachts.”
NFS.com: “What is the French Leasing though?”
Sabine: “Essentially French Leasing is based on a state law of France which is supposed to help the regional boating industry, but can also be applied on non-French brands. It says that – depending on the amount of the first instalment – the interest rate of the French Leasing loan can be as low as 2.5 per cent per annum, which can be very interesting for European clients.”
NFS.com: “But there is a reservation to this matter …”
Sabine: “… yes there is: The yacht must be put into the water and turned over in a French port.”
NFS.com: “Talking of reservations, this brings me to the question what a potentially interested buyer should bring into the proceedings if he is interested in acquiring a funding for his new dream yacht?”
Sabine: “Well, first of all – as this is the case with every financial act – he must be solvent of course. This is to be proven by the normal proceedings of a voluntary disclosure of his financial background. We do check the financial situation very cautiously and there is the rule of thumb that all in all the rate of indebtness of all the financial commitments of the client must not exceed 45 per cent of the household´s income. Secondly, an equity ratio of at least 30 per cent of the price of the yacht should be payable upon conclusion of the contract so that the amount of the boat´s price to be financed is around two thirds of the price.”
NFS.com: “A yacht is a luxury product …”
Sabine: “… and that’s why we check very thoroughly if the client is able to afford this kind of product. Last but not least, we need the data of the boat which we normally get through the dealer of the client who will sell the boat.”
NFS.com: “Sabine, tell me what is the real advantage of seeking a financing loan by the SGB Finance?”
Sabine: “First of all we do nothing else than giving loans for boats. This is what we do, it´s our specialty and we are best at this. We don´t do houses, cars or other loans, we just do boats. And this is what we have done for more than 40 years now and I think this speaks for itself. We are a partner you can trust. And as we are partially owned by the Beneteau Group and the Societe Generale, especially financing your new Beneteau is what SGB makes very attractive. Another option for any brand on the market can be the CGI Finance, which is essentially the same bank. But besides this, with SGB or CGI loans, it´s standard offer that the client can do special payments anytime he wishes and even completely pay off the whole debt at will without any penalty given. That´s something you hardly get with normal loans.”
NFS.com: “Sabine, thanks for this enlightening conversation!”
If you are interested in the details of buying a new or used yacht via CGI/SGB, please contact the banks via their websites.
Other interesting articles related to this topic:
Delivering a brand-new yacht – and what this really means.
Buying a used boat and what you should look for.
Black hole yacht refit?