UK government keen to finance superyachts
The UK Government has revealed a new finance plan to help domestic shipbuilding including yacht and superyacht yards.
Under the Shipbuilding Credit Guarantee Scheme, the UK government will guarantee up to 80% of a shipping loan. Loans can be up to 85% of the yacht’s value. This means that UK Export Finance would be prepared to guarantee up to £68m for a £100m yacht. Financing can begin during construction of yachts helping yards with cashflow.
“Shipbuilding is an integral part of the UK’s industrial identity and through this scheme we are backing our great maritime businesses to get ahead of the competition,” said Nusrat Ghani, UK minister for Industry and Economic Security. “With cutting-edge vessels designed and built here in the UK this will be a boost to high-skilled careers and every company involved in the supply chain for shipbuilding, helping us to grow the economy.”
“The exciting part of the Shipbuilding Credit Guarantee Scheme is that it can be used for domestic buyers as well as for ship exports – which have always been available for UK Export Finance support,” said Andrew Woolfson, vice president, Europe and Africa at AirFinance, a specialist export credit loan arranger.
Other countries offer similar export finance but they are more commonly used for commercial vessels rather than yachts. Woolfson said that with yachts the UK scheme is most likely to be used by corporates – such as fractional ship companies, ferry companies or owned charter fleets rather than individuals.
“It is usually simpler if you can use corporate guarantees rather than personal guarantees,” said Woolfson. “Banks can also use the scheme to syndicate risk, so it is a good for credit committees looking to sell down portfolios. It is exciting for UK shipyards.”
We may not see many yacht buyers use the scheme, but every new provider of capital is good news.
Meanwhile, read more about the Shipbuilding Credit Guarantee Scheme here.