Key Recreation Lending's Luxury Yacht Lending division, a unit of Cleveland-based KeyBank NA, introduces three new financial programs for yacht buyers: letter of credit, construction loan, and balloon note. These new financial tools, added to the full suite of lending options, allow Key’s Luxury Yacht Lending professionals to meet the very specific financing needs of clients.
“We’ve continued to diversify our yacht lending options so we can fully meet our customer’s needs for attractive financing alternatives that complement personal investment and financial planning strategies,” said Grant Skeens, president and CEO of Key Recreation Lending.
According to John Relyea, national direct sales manager, “In this market, clients value service and products that ease all aspects of the transaction process, and the ability to access a variety of flexible financing solutions is vital.” “We’ve continued to diversify our yacht lending options so we can fully meet our customer’s needs for attractive financing alternatives that complement personal investment and financial planning strategies,” said Grant Skeens, president and CEO of KRL.
According to John Relyea, national direct sales manager, “In this market, clients value service and products that ease all aspects of the transaction process, and the ability to access a variety of flexible financing solutions is vital.”
Letter of Credit
The letter of credit program provides a valuable financing tool during the construction and import phases of a new yacht purchase, and allows for easy transition into permanent financing. Features of this program include:
- Letters of credit available starting at $500,000
- Standard terms up to 24 months or more
- Interim financing available while the yacht is being transported to the United States
- A full assortment of end loan options including fixed and variable rates, interest only and LIBOR options
New Yacht Construction Loan Program
The new yacht construction loan program “is ideal for clients interested in maximizing their assets while taking advantage of competitive interest rates with minimal out-of-pocket expenses,” says Jim Velez, KeyBank Luxury Yacht Lending manager. Loans of $500K or more for terms up to 24 months, or longer in selected cases, are available with a 25 percent down payment. Interest rates for this program are typically tied to the 30-day LIBOR index.
As with the letter of credit program, the new yacht construction loan program allows for easy transition to a full assortment of end loan options including fixed and variable rates, interest only and LIBOR options.
Balloon Note Program
The new balloon note program provides a fixed rate for the first five or seven years, and then a balloon payment. Clients take advantage of a discounted rate on a 20-year term loan, with a five- or seven- year balloon provision. “When you consider the fact that the majority of yacht clients trade or sell within three or four years, the value of this option becomes apparent,” explains Velez. This program is available for loan amounts of $250,000 or higher.