Another marine lender gone
 

Key Bank pulling out of marine lending
Thursday, 25 September 2008 11:57
Key Bank, one of the largest marine lenders in the country, announced today that it is pulling out of the marine lending business and ending recreational lending altogether.


Grant Skeens, president and CEO of Key Recreation Lending, confirmed that the bank is pulling out of the marine and RV retail and commercial lending business, ending its 50 years in recreational lending. The announcement was made to employees at 10:30 (EDT) today.

The last day marine retail applications will be taken is Oct. 27, and the last day for funding applications will be Nov. 14, Skeens told Trade Only Today this morning. The bank will work to transition its dealers to other sources of floorplan funding over the next 90 to 120 days, he said.

Skeens said the decision was "very difficult."

"Certainly if you look at the prospects for the [marine] industry over the next 12 to 18 months, they aren't very rosy," Skeens said. "I would tell you margins in retail continue to be thin for lenders."

Key Bank is one of several lenders to recently pull out of marine lending. This summer, Citizens Bank and Wachovia pulled out of marine finance altogether, and GE Money quit retail marine lending.

:eek:

WOW! That is a really surprising. Thanks for passing along that valuable info Kyle.

Kyle, who are the top 5 now, is National city out of it too?

Thats too bad, no retail and the no floor plans is more surprising. Going to be a very tough time for dealers if too many more shoes drop.

Wait the Gov. is coming with 700B bail out!!!!!!!!! Oh thats only for Wallstreet tycoons:mad:

Yes, National City shut down their dealer and broker program over a year ago although they still lend through their branches. The remaining biggest players in marine lending are BofA, SunTrust, USbank and Bank of the West.

As you referred to, Key exiting the wholesale side is going to have a big negative impact on the industry with over a billion dollars in floorplan lines going away. At least when GE left the retail side earlier this year, they kept their wholesale operation in tact.

What are the ramifications of the events of the last couple of weeks, coupled with this news, to boat buyers? Is it too early to tell, or is the lending criteria going to be incredibly strict now? 800 scores, much lower debt to equity ratios, much higher percentage rates (how much higher -any guesses?) etc...

30% down 10-12 yr terms rates at 7.5% and 700+ fico

my guess

700's too low for the best rate.

Best home loan rates now require 760. Expect all consumer rates to follow suit.

Also, low 8's is about the current norm for marine financing with an excellent credit score.