How lenders view new vessels
A new vessel from a recognised builder presents a clean, well-understood risk to a marine lender. The value is established by the purchase contract, the VAT position is clear, there is no survey uncertainty, and the builder's warranty provides a degree of comfort against immediate defects. The asset is at its highest value at the point of purchase and depreciates from there.
For these reasons, new vessels typically attract the most favourable financing terms: the highest LTV limits, the most lender options, and the least documentation complexity. The main risk a lender carries is depreciation — if the vessel needs to be sold after a default, the market price may be below the purchase price — which is why most lenders do not finance 100% of the purchase price even for new builds.
How lenders view used vessels
A used vessel introduces additional variables: the vessel's actual condition versus its claimed condition, the reliability of the asking price as a reflection of market value, the VAT history, and the remaining useful life. Lenders manage these risks through survey requirements, age limits, and adjusted LTV limits.
For a well-maintained vessel under 10 years old in good condition, the financing process is broadly similar to a new vessel. The documentation is slightly more involved, a survey is typically required, and the LTV may be marginally lower. For older vessels — particularly above 15–20 years — the picture changes more significantly. See the dedicated guide on how vessel age affects financing for a full breakdown.
LTV limits compared
| Vessel type / age | Typical max LTV | Notes |
|---|---|---|
| New vessel, recognised builder | 70–75% | Some private banks to 80% for strong profiles |
| Used, under 5 years old | 65–70% | Broadly similar to new |
| Used, 5–10 years old | 60–65% | Survey required, condition dependent |
| Used, 10–15 years old | 55–60% | Survey required, lender pool narrows |
| Used, 15–20 years old | 50–55% | Specialist lenders only in some cases |
| Used, over 20 years | 40–50% | Limited lender options, specialist market |
These are indicative ranges. Individual lenders set their own thresholds and apply them based on the full buyer profile — a very strong buyer may achieve better terms on an older vessel, while a weaker profile may face tighter limits on a new one.
Survey requirements
For new vessels purchased from established builders, most lenders accept the builder's specification and purchase contract without an independent survey. A pre-delivery inspection — confirming the vessel matches its specification at handover — may be required or recommended.
For used vessels, an independent out-of-water survey by an approved marine surveyor is standard for any lender. The survey must typically be recent — usually no more than six months old at the point of loan completion. The surveyor's valuation, not the asking price, is often the basis for the lender's LTV calculation.
If the surveyor's valuation comes in below the agreed purchase price, the LTV is calculated against the lower valuation — meaning the buyer must either renegotiate the price, increase their deposit, or find additional funding for the gap. This is a common source of late-stage financing complications on used vessel transactions.
VAT position differences
A new vessel purchased from an EU dealer comes with a clear VAT invoice. The VAT paid status is unambiguous and well-documented. Lenders and future buyers can rely on it without further investigation.
A used vessel may have a complex VAT history — particularly if it has changed hands multiple times, operated across multiple flag jurisdictions, or entered and left EU waters. Verifying the VAT paid status is an important part of due diligence on any used EU vessel transaction. Lenders require clarity on the VAT position because an unclear status affects saleability. For a full explanation, see yacht VAT explained.
Vessel age limits
Most mainstream marine lenders set a maximum vessel age at the end of the loan term — typically 20–25 years. This means that a 12-year-old vessel financed over a 10-year loan would be 22 years old at maturity — borderline for some lenders. A 15-year-old vessel on a 10-year term would be 25 at maturity — outside many standard lenders' limits.
Where the age limit is an issue, the options are: a shorter loan term, a larger deposit reducing the LTV, or using a specialist lender or private bank with more flexible age policies. Some private banks will lend against classic or well-maintained older vessels on a case-by-case basis where the asset quality justifies it.
Documentation differences
| Document | New vessel | Used vessel |
|---|---|---|
| Survey | Usually not required | Required — out-of-water |
| VAT documentation | Builder invoice | Full VAT history verification |
| Valuation basis | Purchase contract | Surveyor's valuation |
| Builder / title check | Builder confirmation | Title search, encumbrance check |
| Flag / registration | New registration | Transfer of existing registration |
New and used vessels are both financeable. The differences are in the detail — survey requirements, LTV limits, and documentation complexity increase with vessel age. Getting clarity on these before making an offer avoids renegotiation after the survey.