LMA Credit Lines An Option for Go-Fast Boat Buyers

Loan Management Accounts are a financing option for buyes who have securities.

While loans for high-performance powerboats remains scarce to nonexistent, there is a financing option for would-be buyers who hold securities including investment portfolios and Individual Retirement Accounts. Dave Patnaude, vice-president/client manager for Bank of America Merrill Lynch, dealer financial services, suggests looking into a securities-backed Loan Management Account.

“LMAs have become a good alternative for people trying to finance high-performance boats or purchasing boats overseas that can’t be financed until they reach the States,” said Patnaude. “In two instances, one in Italy and one in France, the buyers used LMAs to purchase the boats, bring them to the States and then convert to conventional boats loans.

“When you’re dealing with people who buy Skaters and MTIs and so on, you’re dealing with people who have nest eggs but don’t necessarily want to liquidate assets to buy a boat,” he added. “An LMA credit line is a very convenient way with very attractive rates, as low as 3.5 percent, for them to finance a high-performance boat. There’s no minimum balance and no annual fee.”

In the overall powerboat market, Patnaude said that refinancing is going strong with rates as low as 4.5 percent. The exception, he said, is in the high-performance segment.

“Refinancing is booming everywhere but there,” said Patnaude. “Everybody is still very cautious in terms of performance boats because of the losses that are incurred when those types of boats are repossessed.”