How to Prequalify for a Loan for Cruise Ships

For a complete novice, prequalifying for a loan for large marine vessel or a cruise ship can be somewhat difficult. The entire financing process begins with a formal loan application. An application is given to a finance company, allowing them to accomplish a verification on your company’s credit or on your personal information.

Cruise Ship

Here is a valuable discussion that can help the first timer regarding cruise ship finance. Your loan application must include basic company information, background and financial information like copy of last year balance sheet. If you apply as a private person you should state your full legal name, physical address, contact information, property/asset ownership details, employment history, debt service as well as financial records.

The finance company will then confirm your monthly earnings. You will have to submit your tax return for the last two years or present a financial statement that comprises information on your business and properties. This information enhances the buyer’s chances of getting his or her loan for cruise ship finance approved. Pre-qualifying for a large vessel loan for quality cruise ships for sale is a strategic process that provides buyers with a financial structure to guide you all the way through the financing course.

Consulting a loan broker that specializes in ships and vessels provide purchasers with access to various marine loan lenders. This further enhances your scope and your odds of finding a specific plan that suits your budget plans. There are international banking corporations that specialize in ship financing. However, these bankers basically accept reputable ship owners with whom they have a long lasting relationship.

New buyers or a start-up company are recommended to go to a local bank where buyers have a good rapport. It is also possible to finance cruise ships through bonds, but this actually works for larger investments, for instance, USD 200 mill and above. Bankers usually need a good business plan and a credit worthy applicant.

However, buyers should not forget that hiring the service of ship loan brokers may put your credit score at risk. A ship loan broker submits your application to different marine loan lenders to seek the best deal. Ship loan lenders run a credit check always after having received an application, thus reducing your credit report. Hence, submitting your loan application for cruise ship finance to several marine loan lenders is not desirable as it may reduce your credit to a great extent. It’s always wise to speak to your broker regarding this procedure.

Hiring ship loan brokering services is mostly used for bond financing. It is good to search for alternative market and for larger investments this can be the bond market. For smaller cruise vessel investment your local bankers can be the best option. You can opt for a fixed-interest marine loan, or balloon-payment or one with a convertible rate.

Role of Specialized Sale and Purchase Brokers in Shipping Business

Sale and purchase brokers specialize in ship broking and their clients and customers are usually ship owners. As middlemen in the business of buying and selling ships, shipbrokers play a major role. They deal with ships that are a technically complex commodity and in an international market it is extremely volatile and subject to incredible swings. The brokers should have good knowledge of ships and their owners along with particular information of each individual ship and the existing market scenario as this helps them in advising their clients on its probable direction.

ship broking companies

Dealing with New or ‘used’ Vessels

Building a new vessel is normally handled by a broker who specializes in contracting of new ships. These professionals have good acquaintances with the shipyards worldwide. They also know where to find yards with vacant building capacity and to acquire the best prices. Used or second hand vessels are usually marketed for sale through the ship brokering channels. Thus, highly specialized ship brokers within the market segment buyers seeking for tonnage can guide clients to get the best deal.

Prices vary with Ships Changing Hands

A ship broker may deal with new or “used” vessels, communicating between the shipyard and the purchaser in the former case, and between two owners in the later on. Since, ships change hands¸ the price may affect their profitability during their lives and it is here the responsibility of the broker is considerable. Ships are assets with asset and shipbrokers know that they play a vital part in the business. During a ship’s life time, it can be sold several times. The value of a ship is determined by its condition, quality and market conditions. Ships are being sold almost every day and normally the ship brokers remain responsible for handling ship sales.

Professionalism Required for Getting the Best Price for Clients

In a ship sale transaction huge sums can be involved. Hence, expertise and great professionalism are required in this important business. The negotiation of price as well as any sale conditions is a crucial part of the broker’s remit. A broker can be instructed by either a seller of a vessel or a would-be buyer. At the time of representing a seller, the broker may seek customers either from his own contacts, in both the broking community, or among ship owners who operate same types of ship and may be looking to purchase.

The primary objective of shipbrokers is to get the best price for clients. The world of any ship sale and purchase broker quickens once a potential deal is in sight. The price and terms can be negotiated, and the contract prepared. Leading ship broking companies in Norway or elsewhere in the world always have a large number of ships on its books and satisfying the needs of the seller is relatively easy.