Factory Self Finance
02-17-2010, 07:38 AM
#1
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Factory Self Finance
if banks are not lending to customers with good credit scores,because they need to shore up there own books,,,why wouldn,t a boat builder,check a customers credit out,,,and do the financing themself,,,,,if not every deal at least 1 in 3 deals,,,seens to me it would jump start some sales
02-17-2010, 10:08 AM
#2
21 and 42 footers
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I run a business and usually bill a customer for the work and wait to get paid.......I have to FRONT that money and wait for mine (paying labor, buying materials, etc). Essentially becoming a bank but without a bunch of other peoples money to use while waiting for MY money. I'm sure most builders would do that IF they had millions laying around they could lend out to people....but with the default rate higher than it's probably ever been I'd consider them fools if they actually did finance boats.
These are toys, IMO they shouldn't be financed anyway!!!
These are toys, IMO they shouldn't be financed anyway!!!
02-17-2010, 11:57 AM
#3
Charter Member # 55
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Because none of the boat builders have the cash to do it and most likely they would not want to. They cannot spread the risk like a bank or finance company can. Builders and dealers are having a hard enough time getting there own stuff financed right now.
02-17-2010, 12:36 PM
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That would be one good way to put alot more boat builders out of business....is to start financing their own products... Alot of them are just hanging on by a thread now with lack of sales... let alone giving them away on the hope that ppl will actually pay for them...
02-17-2010, 01:12 PM
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I would be willing to bet you see it in the next year or so. Maybe not even by a large builder but maybe by a smaller one. Like you said maybe not every one but 1 out of 3 is a good number. Maybe a little higher interest with a little higher down maybe the builder would be the dealer and take trades maybe just a case by case scenario.
Maybe builders or even dealers could better use their money made off the cash sales towards financing instead of spending more advertising.
Maybe builders or even dealers could better use their money made off the cash sales towards financing instead of spending more advertising.
I would bet my last dollar that that will never come about... Just like the car indusrty for years did their own financing and look at them now... GMAC, Chrysler Finance, Ford Motor Credit, none of them and solid...
02-17-2010, 01:23 PM
#6
21 and 42 footers
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I would be willing to bet you see it in the next year or so. Maybe not even by a large builder but maybe by a smaller one. Like you said maybe not every one but 1 out of 3 is a good number. Maybe a little higher interest with a little higher down maybe the builder would be the dealer and take trades maybe just a case by case scenario.
Maybe builders or even dealers could better use their money made off the cash sales towards financing instead of spending more advertising.
Maybe builders or even dealers could better use their money made off the cash sales towards financing instead of spending more advertising.
hell, at 25% down and 10%, you might find a couple members here on OSO that might make that deal!!!!
02-17-2010, 03:07 PM
#7
21 and 42 footers
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so the boat has an actual cash "cost" of $180K x 6= $1,080,000.....PER YEAR. I know your plan shows profit over the course of the loans but how many of these guys really have a MIL a year laying around to loan out (because these boat companies are really just owned by one or 2 guys). Remember that $180k you reference is actual cost the builder is PAYING out to suppliers, etc......boats aren't that easy to repo and when they are, they've usually lost 50% or more value due to the condition they've been kept in.
Now, if your looking at a boat that cost $180K to build I bet you could walk out with it after spending just $200K of YOUR CASH.
If you think I'm wrong......then you've found a business model you really need to pursue. I'm sure a number of manufacturers would cut you a hell of a deal to finance boats for their buyers!!!!
Now, if your looking at a boat that cost $180K to build I bet you could walk out with it after spending just $200K of YOUR CASH.
If you think I'm wrong......then you've found a business model you really need to pursue. I'm sure a number of manufacturers would cut you a hell of a deal to finance boats for their buyers!!!!
02-17-2010, 03:23 PM
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I don't think it would work for new boats. The initial cost of the hardware is too expensive. You would find deadbeats that would buy the boats, use them a little here and there, sell the motors and drives, keep the cash, and let you have the boat back. It only takes a couple of those deals to sink a boat manufacturer.
That said, as a used boat owner I would seller finance my vessel. All I would require is the price of replacing the drives as a minimal down payment.
That said, as a used boat owner I would seller finance my vessel. All I would require is the price of replacing the drives as a minimal down payment.
02-17-2010, 03:35 PM
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I was thinking 20% down which was the norm at one time. 8% but lets do some hypothetical numbers.
Boat msrp 300,000
20% down 60,000
payment $2000 for 20 yrs
collected per year $24,000
Boat actual cost $180,000
minus down payment $60,000
$120,000
120,000/24,000yr = 5 yr return actual money
Sell 20 boats a year finance 6
Profit 80,000 ea for the 14 cash or financed elsewhere(after discount for cash)
14x80,000=1,120,000
6x120,000=720,000 money financed
profit $400,000 per year + 12,000 month income for 20 years. even in the winter.
even if you figure a default you still get the boat back woirst case no motors you still covered yourself in the down payment.
Doing this the company may not be able to aford a jet or to spend stupid money on racing sponsorships but would be a boat company that would last. even through a time like this.
Whats the worst case you get your boat back and sell it again.
Boat msrp 300,000
20% down 60,000
payment $2000 for 20 yrs
collected per year $24,000
Boat actual cost $180,000
minus down payment $60,000
$120,000
120,000/24,000yr = 5 yr return actual money
Sell 20 boats a year finance 6
Profit 80,000 ea for the 14 cash or financed elsewhere(after discount for cash)
14x80,000=1,120,000
6x120,000=720,000 money financed
profit $400,000 per year + 12,000 month income for 20 years. even in the winter.
even if you figure a default you still get the boat back woirst case no motors you still covered yourself in the down payment.
Doing this the company may not be able to aford a jet or to spend stupid money on racing sponsorships but would be a boat company that would last. even through a time like this.
Whats the worst case you get your boat back and sell it again.
02-17-2010, 04:09 PM
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I don't know about that. I think the biggest cost in the boat may very well be depreciation. The difference between a brand new boat and a one year boat is a HUGE price difference. I realize that it's not a direct cost, but the dealer would still have to re-rig the boat to sell it again, and they wouldn't be able to sell it as new the 2nd time around...
