The term "Maritime financing" covers a variety of transactions involving the purchase or sale of maritime equipment. We are principally involved in "owner financing" or "alternative financing". Before going into the type of financial arrangement we do, it is important to understand conventional or standard financing.
CONVENTIONAL MARINE FINANCING
Conventional marine financing involves a security arrangement with a bank or other lending institution, by which money to purchase a vessel is received in exchange for a security interest in the vessel.
The security interest generally takes the form of a First Preferred Ship's Mortgage. The borrower executes a "promissory note" promising to tpay the loan, as well as, a First Preferred Ship's Mortgage which pledges the vessel as security for the loan. The note usually obligates the borrower personally so that if the vessel is foreclosde and sold byu thelender, the borrower must pay any deficiency if the vessel does not sell for enough to pay the entire loan.
This mortgagor pledges the ship as security for the loan and has priority over most other claims with some specific exceptions.
TYPES OF LENDERS
Standard commercial financing depends upon your credit history, amount of down payment and the evaluation of the ship.
Marine lending is viewed as a high risk market due to the nature of the business and the fact that the ship may leave U.S. ports and never return.
The fear of seeing their security sail over the horizon inhibits many bankers.
Contact us today for more information