CHICAGO, Ill. — A white paper developed for lenders by the National Marine Bankers Association anticipates significant opportunities for financial institutions as the recreational boating industry recovers, according to a release from the NMBA.
The report says the upside potential for banks and other credit providers may be higher than previous years since so many lenders were forced from the market as a result of the credit collapse.
"Today's recreational marine lending landscape is rich with opportunities," said Bill Thompson of Cardinal Points Network, LLC, who drafted the white paper on behalf of NMBA. "Due to recent fluctuations in the credit and capital markets, demand is greater than supply for retail and commercial floor plan lenders. As a result, interest rate spreads have increased and the profit potential is improving."
The report notes that subprime activity was minimal in boat financing and delinquency rates were lower than other consumer credit categories, averaging 1.1 compared to 1.8 respectively, in 2007. In addition, boat buyers are mostly middle class — three out of four have a household income of $100,000 and under, and present healthy lending opportunities for banks. Finally, the reports says recreational boating has experienced consistent economic cycles since the '70s, creating some predictability for lenders seeking future growth opportunities.
The six-page summary offers demographics on the boating consumer, a situation analysis of the financial needs of the boat dealer and manufacturer, and insight on commercial floor-plan lending, according to NMBA.
The white paper was produced by NMBA in conjunction with the National Marine Manufacturers Association to raise awareness of lending opportunities in the marine industry. It can be found in its entirety at marinebankers.org along with a webinar titled, "Finding New Funding Sources and Building Lender Relationships."
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