Financing your Catamaran or Trimaran

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When we talk about two or three hulls, the price goes up, and often requires a loan. Given the low interest rates available at the moment (around 4-5%) taking on a loan to finance your project looks like an increasingly interesting option. In some cases, a loan can have an impact on the legal and fiscal status of your multihull. When buying a boat, whether as a private individual or as a company, the banks offer two possibilities: a loan or a lease-option deal. The loan needs to be secured by a maritime or property mortgage if the risk is high. You are the boat owner and the boat’s documents are in your name. This applies to new and second-hand boats. The length of the loan can be as long as 25 years, although the average is 10. In practice it’s possible to finance a 10-year-old boat over 15 years. The deposit is usually 20-30% and the depreciation schedule can evolve based upon your situation. For example, you can have smaller monthly payments throughout the year, and one big payment at the end to coincide with your dividends being paid out. Each bank has its own particularities, and advice from an independent broker, like Jérôme Wydauw of W.Lease, can be really useful when looking for an offer which suits your needs and constraints. There is also the question of insurance to be considered.

Leasing: Two Different Possibilities

The other type of loan is leasing. Leasing is only available for companies, and the Lease-Option deal is available to companies and private individuals. In this case, it is the bank or lender who buys the boat in their name and charters it to you over a fixed term which is decided at the outset (3 to 15 years maximum). You will then have the possibility to become the owner at the end of the period by paying off the purchase option, which is stipulated in the original contract, as a final charter payment. In some cases, the initial downpayment (1st charter payment) can be considered as the buyback amount. Watch out though. This format is not systematic with all leasing contracts. There are several advantages. The boat cannot be seized by any creditor other than the lender.  It does not count as part of the charterers personal wealth and is not subject to a wealth tax in the countries where it applies. For a company, the rents are depreciable and the sales tax applies to everyone. For the period that the charterer is not the owner, he or she is still responsible for the boat, in particular if there is a law violation or an accident. In Europe, it is the lender who pays the sales tax, and they will then possibly pass this cost on to the renter through the rents, either partially or sometimes not at all. Two sales tax régimes are possible: a fixed amount or the real amount. Given that cruising boats are often outside territorial waters (+ 6 miles from the coast), the government offers a 50% reduction in the sales tax on the charter. The fixed rate is therefore 10% instead of 20% in France. Since 2006, the sales ...

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