April has seen us finance a large number of boats including canal boats and sea going craft.
Are you promoting the benefits of finance to your customers?
Vendors may also see the benefit of you helping to sell their boat by promoting finance as means to help sell boats. Talk to us about how we can work with you and assist with regulation guidelines.
A significant step for us this month is Tina Braithwaite joins us as South Coast Business Manager. Tina has known Stuart for more than 30 years and being based in Winchester is ideally located and looking forward to a career change. Tina has a corporate background in Buying and Marketing so will bring some new ideas to our organisation.
Tina can be contacted on email@example.com and 07720 214831
We are exhibiting at the Crick Boat Show on stand MR6, please come and say hello. The show is over the bank holiday weekend Saturday 28 to Monday 30th May.
We are seeing a wide range of boats from new customers and existing customers upgrading to bigger and more exciting craft.
Our turn arounds are still less than 30 minutes – here are just a few we have financed and some of the locations visited this week.
Here is a Rinker we financed in 2012 and hopefully should be with her new owner next week.
This is the second boat for our young entrepreneur, a Princess 460
A lovely day on motor bikes saw us in Aberystwyth and Aberdovey watching youngsters being braver than we are
And we also attended the Midlands BMF meeting canal side in Birmingham
Boat sellers are able to register directly with the FCA for limited permission or full permission credit activity. This can take up to 12 months, costs £300 and involves regular reporting of credit activity to the FCA via their online reporting system. FCA website
If you don’t want this hassle you can apply to become our Introducer Appointed Representative (IAR). This then allows you to promote finance, introduce customers to us and advertise finance (with our compliance advisers approval). There is no cost to you just a simple form to complete and to sign a contract with us.
Promarine do all the work for you and as a “principal” firm we are responsible for your consumer credit activity and reporting on your behalf to the FCA.
If you want to know more please email firstname.lastname@example.org or call on 01432 347770
This week, early Feb myself and Iain visited Neil Smalley’s factory and saw the boat just needing windows adding before being transported to her new home and ready for Mark to start the fit out.
It has been an interesting learning curve and everyone has been helping each other.
We already have our next boat ready to build as soon as this one makes room next week.
So if you are interested in one like this give us a call or speak to those concerned directly
Iain Jones www.jonesmarinesurveys.co.uk
Neil Smalley The Sail Away Boat Company, Nr Mansfield
Tel 07474 668885 and email email@example.com
British Marine have published several quotes from UK marine industry leaders all saying positive things about their show results. The link to the page is below.
British Marine tell us that “90,328 people visited the show and strong sales have been reported throughout the duration of the Show, with many companies reporting an increase on last year’s figures including numerous multi-million pound deals.”
Did exhibitors make the most of the London Boat Show? Could they have achieved more sales, and if so how? asks Stuart Austin, Director of Promarine Finance
When I visited the show on Tuesday and Wednesday I was shocked to see how few visitors were there. This was not just my impression but was confirmed by many of the exhibitors I spoke with. In fact exhibitors had a lot of spare time and shared many views with me about their own sales performance and how they perceive my company, Promarine Finance, in the market.
I heard the same comments repeated numerous times and so I have decided to address those comments in this article.
Customers are not buying boats – well only you know how much this applies to your business.
All my customers pay cash – this is what you expect if you only offer your customers a cash payment option?
But the 2nd statement really does tie in with the 1st. Your customers can only pay you cash if you don’t offer an alternative but currently it appears customers are not buying boats from you. Or certainly not buying enough boats at the right price.
So do potential customers have the cash and why are they not buying boats? How can you tell which customers have cash and which will buy? I don’t think you can and I don’t think you should try to find out.
It is worth considering the options that might address statements 1 and 2 above to add sales to your business.
Discounting – in 1991 the machine tool suppliers in the UK were not selling machine tools. When I asked them why, suppliers told me customers could not afford their machine tools. The suppliers’ solution was to discount their products until customers could afford to buy them, but in reality price was not the issue. So yes, this approach can win sales but will damage your profits and long term business plan because the discount will need to be massive. What does this strategy do for your product?
- Supplier credit terms – is an option if you can afford to give credit to customers allowing them to delay payment. Can be damaging to cash flow and you have exposure to customer credit risk. Are you a bank or do you want to be like one?
- Finance – it is not surprising that I recommend finance as the best, if not the only workable solution. Most luxury items are sold with finance because it works e.g. cars, motor bikes, watches, houses, holiday homes, motor homes, caravans, conservatories etc.
So why not give customers the option to pay for their boat by
spreading the cost of the boat?
Finance versus Cash
Selling boats for cash means you have got lots of competition.
A well-known iconic motor bike manufacturer surveyed their customers to establish who their main competition was – they found the answer surprisingly was not other motor bike brands but conservatory sales. Customers faced the choice of buying the bike or a conservatory.
The boat you want to sell is in competition with many other items customers want or need.
Offering a finance solution can win incremental business – you will not lose your cash sales but you will pick up additional sales from new customers.
I am uncomfortable mentioning finance
We often hear this stated by sales people who do not choose to finance purchases in their own personal life and are therefore uncomfortable with offering a finance option to their customers. This is probably the single most common objection I come across and to be honest I am still looking for a good solution.
Is the sales person who is not using finance overlooking their own circumstances? Do they have a house a mortgage? Car finance? Credit card? 0% finance purchases?
Should the sales person make a decision to exclude a purchasing option for their customer for whatever reason unless stated by the customer?
I don’t want to suggest to my customer they cannot afford the boat
Giving customers the option to spread the cost of a boat is helping them to buy and justify the purchase. £10k over 5 years costs from £250 per month – some customers viewing a boat purchase will view this as a sensible option to cash. If cash is not available or in demand for other purchases the finance option can win the deal.
Our standard terms are available at the link below which is also on our web page.
Promarine Finance is expensive – Yes, we are compared to the established marine finance players and we cannot compete on price with them, nor do we wish to.
Promarine Finance is a relatively small, independent business that is predominantly looking to finance boats that the banks will not finance. Our marine mortgages start from £3k and go up to £70k and can be underwritten in less than 30 minutes. We have a different business model!
Lower rate option available
We recognise that there are some customers who are purchasing boats that fall outside the marine bank lenders criteria and that these customers have the option to borrow from other sources at lower rates than we can offer. In recognition of the rate objections raised at the Boat Show, we are now introducing a lower rate finance option for a trial period.
Qualification criteria for our new rate subject to credit approval
- New boat
- 55% loan to value
- Max term 5 years
- £10k now £250 pm over 5 years
How should I introduce finance? – we have a different take on selling finance.
Most finance schemes usually lend the full value of the item and offer a minimum deposit. These schemes are nearly always subsidised by the manufacturer or retailer. Eg car finance, household goods.
Our average loan amount is approximately 50% of the boat value. This suggests to me that our customers are using Promarine Finance to top up their purchasing power or alternatively allowing them to keep more cash in the bank. We all want a financial safety net.
So with this in mind, I am suggesting boats costing from £12k to £20k could be advertised at £250 per month (£10k over 5 years at the new discounted scheme) with a range of deposits from £2k to £10k.
Similarly boats with a cost of £18k to £25k can be advertised at £375 per month (£15k over 5 years) with deposits from £3k to £10k or even at £250 per month using the £10k example above.
And this format can be used for more expensive boats too.
More expensive boats of say £30k can be illustrated with loan amounts of £15k or £20k
We are looking at ways to help you to get the customer to perceive the cost of the boat in a different way. And a way that will help them justify buying from you.
What about Consumer Credit Licence and regulation
The Financial Conduct Authority, (FCA website) is now controlling the consumer credit industry and the consumer credit licence is now obsolete.
To offer, promote and introduce finance you need to be authorised to do so by the FCA.
The alternative option, if you work with Promarine Finance, is to display Promarine Finance advertisements rather than your own. You can also display our leaflets.
If the customer has any questions concerning finance then they should contact Promarine Finance.
Alternatively you can register with the FCA for Limited Permission Approval and become more involved in the finance process.
We now have a Twitter account @PromarineInfo and we have been tweeting about finance for boats. We have been using #spreadthecost as our hashtag and we will be continuing to promote financing of boats in this way.
Please do get in contact with me if you want to discuss how we can help you to win more boat sales in 2016. Our aim is to help you build on the success of the London Boat Show for the coming season and beyond.
Duncan and Symon of Torbay Sea School approached us wanting to purchase a 7.8m Ribcraft enabling them to extend their RYA Powerboat courses. The RIB was 3 years old and originally supplied for use at the 2012 Olympics. The RIB has been coded by the current owner who has been hiring the RIB to the sea school for 12 months. Duncan advised us they wanted to buy the RIB in order to help build their business and provide exclusive use for their RYA and bespoke powerboat courses. For more information about Torbay Sea School please follow this link www.torbayseaschool.co.uk
With the London Boat Show just about to start, we think it’s worth a quick reminder that Promarine Finance is able to offer marine mortgages to finance leisure and commercial craft with loans from £3k to £70k.
Stuart Austin will be attending the Boat Show at ExCel on Tuesday 12th and Wednesday 13th January so if you would like to arrange an appointment to meet up with him, just let us know. We can obviously arrange boat deals at any time during the show – just call the office on 01432 347770.
ProMarine is able to finance new outboard engines for customers who are looking to re-engine existing boats. Our marine mortgage is secured on the engine and the vessel and we will lend up to 70% of the combined value. This means it is possible for customers to include some extras such as marine electronics.