1. Introduction and Market Overview

[4-001] Introduction. Most large yachts are owned by corporations, although many smaller pleasure yachts are owned by individuals. In both cases, however, the owners may wish to finance the acquisition of the yacht, either as a newbuild or as a second-hand yacht, by means of commercial bank financing—either by lease finance or loan finance, or by means of a secured loan from a private bank specialising in the provision of yacht finance to high or ultra-high net worth individuals. In the past, national governments have supported yacht-building in their countries by subsidised loans (in the United Kingdom the ship mortgage finance scheme under the Industry Act 1972 financed the construction of large yachts), but virtually all such schemes have now ended as a result of OECD rules and EU directives.1