Marine lenders see third quarter drop in new boat activity

ANNAPOLIS, Md. – The National Marine Lenders Association Snapshot quarterly trending survey for the period ending September 30, 2015 shows the lowest percentage of lenders reporting that more than 50 percent of their third quarter business was loans on new boats since 2013. Only 30 percent of respondents indicated new boat sales counted for more than half their volume in boat loans for the third quarter of 2015, down from 41 percent in the second quarter and 42 percent for the same period last year.
Lenders also report a decrease in average loan amount, which could be reflective of the third quarter business being smaller boats or older boats. Twenty-four percent of reporting lenders said their average loan size is down in 2015 compared to 2014. This bucks the trend of seeing lenders steadily claiming an increase in their average loan size for the past four quarters.
Competition for loans appears to be holding steady, as 29 percent of respondents indicate their average margin has dropped in 2015 over last year. The trend line shows margins have been squeezed since the third quarter of 2014. Eighty-three percent of respondents said their volume is the same or up over the third quarter of 2014, while 88 percent expect the fourth quarter to be up or the same as the fourth quarter of 2014.
Overall, lending criteria and credit quality have held fairly steady over the past several quarters.
This quarter’s questionnaire asked lenders what their loan activity expectations for the fourth quarter of 2015 are as a result of the fall boat shows. Forty-seven percent of respondents expect volume to increase more than 5 percent while 36 percent expect no change from the fourth quarter of 2014.
The NMLA introduced the brief quarterly trending survey Snapshot in the first quarter of 2011 to gauge changes in the lending environment and identify trends that could be used for business planning. This survey has gained significant traction and is now delivering valuable results to the marine industry. Thirty-two percent of NMLA lender members (loan originators/brokers/ financial service firms, banks, credit unions, and finance companies) responded to the third quarter 2015 survey, with the majority having a national presence.