New Vessel Construction Loan.
The construction of a new vessel is an exciting project. It provides an opportunity to build a customized vessel to meet your needs. A New Vessel Construction Loan helps you plan your new vessel. Our application forms guide you and your vessel builder in making key decisions on what details your vessel will include.
A New Vessel Construction Loan comes with flexibility. The common construction material is fiberglass. Fiberglass vessels last longer so repayment of the loan can be arranged over 1-20 years. This is designed to make a new vessel affordable.
The repayment schedule can also be tailored to fit the cash flow of your business: Semi-annual or annual repayment schedules are common to match your fishing season. In some cases, interest-only payments can be arranged for certain periods of time.
A client can select fixed-rate full-term financing with interest rate stability for the full amortization of the loan. Or they can assume some interest rate risk and benefit from the three fixed-term rates available with the selected amortization period. The three term rate periods of 3, 5, and 10 years allow a client the opportunity to potentially have competitive rates during the selected term. At the end of the term the rate is reset based on current interest rates at the time of renewal.
A Builder’s mortgage over the new vessel is the primary security for the loan. The mortgage claim is registered with Transport Canada. Additional security over fishing licenses is taken through a General Security Agreement. A notification of a financial arrangement with a lender is acknowledged by the Licensing department with Fisheries and Oceans Canada.