How to finance your boat

As Australians, we're born water babies. Our pristine beaches and waterways beckon us year round. For most people, however, boats to enjoy the deep blue are considered a luxury reserved for the wealthy. But owning a boat can be as simple as owning a car, because there are a range of boat financing options available to regular Australians. Your dream of owning a boat could be within easier reach than imagined. Don't have enough money to fund the entire cost? Most boat financing options work in a similar way to car finance and are available from a variety of banks and finance brokers. If you're a business owner considering adding a boat to your business operations or fleet, remember that many boat financing options are also applicable, or especially for, business boat ownership. Here is a description of the most popular boat finance options available.

1. Secured boat loan. A secured boat loan allows the borrower to borrow the money for the specific purchase of the boat. In this sense, the boat acts as security, or collateral, for the lender. If you fall behind on payments, the boat can be seized. With the loan secured against the boat, however, interest rates are significantly lower than regular loans.  


2. Chattel Mortgage for a boat. As a boat financing option, chattel mortgages are reserved for businesses, and allow a company - whether as a sole trader or a larger corporation - to secure a loan against a boat. With a chattel mortgage, the business owns the boat from the beginning and then pays it off monthly. Usually, the terms of the loan can be suited to a business's requirements, and allows the business to operate the boat at a profit while paying off the mortgage. To be eligible for a chattel mortgage, the boat must be used for predominantly business purposes.


3. Commercial Hire Purchase for boats. A commercial hire purchase is where a finance company buys the boat for a customer, who is then granted use and custody of the boat on a contractual basis while making repayments. The borrower or business will only own the vehicle at the end of the contract term when the price of the vehicle, plus interest, has been paid in full.


4. Boat leasing. When leasing a boat, a financier will buy the boat on your or your business's behalf, and then lease the boat to you over an agreed period of time, usually at a fixed cost. If you choose to lease, you won't own the boat until the end of the leasing period, at which stage you will usually be required to pay the residual cost of the boat. The residual is usually predetermined and reflective of the depreciated value of the vessel. Boat leasing is often a popular option for businesses, as because they don't technically own the boat while leasing, it doesn't have to be included on their balance sheet.

If owning a boat always seemed financially unfeasible, consider these boat financing options, which will allow you to enjoy the pleasures of boating in Australia without having to shell out a lump sum of capital or savings. Wherever you're looking for boat finance - WA, NSW, Victoria, Queensland or SA - financiers will be able to provide more details and information and help you enjoying the amazing waterways of your home town.