FCA update – what you need to legally introduce finance to customers

FCABoat 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 info@marine-finance.org or call on 01432 347770

Wide Beam Sail Away – nearly ready to sail away

Work started on the hull in November 2015 and in December 2015 the hull looked like this. We then paid out 70% of the build cost as confirmed by Iain Jones, the surveyor
IMG_0945IMG_0940IMG_0947

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.
IMG_0980
IMG_0978IMG_0977IMG_0976IMG_0975IMG_0973IMG_0972It 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 boat-builder@hotmail.co.uk

London Boat Show 2016 – how successful was it for you?

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 boatshow review

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.

Rustler 24

 

 

 

 

 All my customers pay cash – this is what you expect if you only offer your customers a cash payment option?

Wealthy person

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, holidayImage result for audi r8 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  

Salesperson

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

MoneyCustomers will not ask for finance because they may feel uncomfortable too. For the past 5 years or so finance for small boats has not been widely available.

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 Loan Calculator

 

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

 

Image result for quicksilver 455

  • 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.

 

Stuart AustinAmericas Cup Helming

 

Solaris 36 Catamaran

solarisThis cat is 1989 and in need of some TLC, which our customer says he is going to enjoy doing over the coming months. After a quick survey in Cardiff Bay we were able to help Mr and Mrs L purchase the boat in time for Christmas. In future the couple plan to holiday on the French canals with their Grandchildren. This is our second and the largest cruising Cat we have financed. Boat supplied by www.multihullworld.co.uk and surveyed by http://yscsurveys.co.uk/

Torbay Sea School expands its fleet to deliver more RYA Powerboat course

ribcraftDuncan 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

London Boat Show – 8th to 17th January 2016

London Boat ShowWith 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.

OUTBOARDS

EngineProMarine 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.

Help us Spread the Word!

TwitterLast month we started focusing on social media with @prpeta (aka ‘Peta the Tweeter’ / Peta Stuart-Hunt) who has helped us to formulate a campaign that is starting to pay dividends in terms of getting our key messages out to a wider audience. We feel it is important both for our existing customers, as well as reaching potential new clients, to embrace new media (as in Twitter/Facebook/Linkedin etc) and we’re learning a few lessons along the way.

For example, what we might think is of interest for people to read about may not have quite the level of impact that we thought, and purely because we’re too close to it. We’re hoping that with some professional external and objective help on board, we will be making all our corporate and client communications more regular and even more interesting!

Please help us spread the word by liking and sharing our posts on Promarine Finance’s Facebook page our Twitter news feed @promarineinfo.

Peta Stuart-Hunt http://www.prworksuk.com/

New Builds & Sail Aways

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Our new customer approached us with a vision of having a Traditional Wide Beam “Sail Away” for him to live on.  If you are looking at Sail Away or other new builds remember to follow the RCD directive http://www.thecba.org.uk/.

We have agreed to finance the new build with stage payments to the builder. The customer’s deposit is the first payment after which we payout in stages. At each stage the new build is surveyed and confirmed to meet RCD requirements so that we can release the agreed payment to the builder.

We are finding more and more customers wanting to escape the pressures of modern living and take to the waterways for a more idyllic lifestyle. Whether new or pre-owned vessels, we can help secure sales and purchases that may otherwise have slipped away without our finance options.

We are just a phone call away.

Upgrading to a better boat

Fairline Targa 43

 

 

Our customer signed up to a 10 year mortgage with us in 2014. Since then he has changed his boat 3 times! Mr P found that the way he used his boat was evolving so it made sense to him to upgrade but only if the new deal could be financed and was affordable.

Our flexibility has allowed Mr P to upgrade to better boats with ease; the latest being a Fairline Targa 43. As an existing customer we approved the finance over the phone. We have several customers that we are currently upgrading. Promarine understands that circumstances change and that eyes can wander…we are here to help customers get exactly what they want!

Send us an email or call to find out how we can help you.