Page 29: of Marine News Magazine (November 2022)

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(“OL V”) up to 85% of OLV. Loan structures allo w the vessel owner/operators to capture the often-healthy depreciation benefts of owning large marine vessels, helping them offset taxable income.

• Longer terms with mission-appropriate amor tization: All project costs can be bundled into one plan, including sales tax, labor and freight. • Flexible payment options can be designed to complement seasonal cash fow requirements.

• Lenders who structure true leases of vessels can offer o wner/operators fxed price early buyout options for future purchase cost certainty.

Working with lenders who are very active in the ma- rine space is critical. Owner/operators want to select f- nance partners with care, as many institutions have come into the marine space during the past 24 months due to various economic factors. Active lenders in the syn- dicated loan market have industry relationships, and are attune to pricing, terms and structures that can “clear the market” successfully.

For instance, some lenders are unwilling to work around long wait times and risk associated with new construction, and/or wary of oil and gas deal exposure. Plan ahead, so you are not rushed to fnd a lender willing to work with you during that timeframe and under those risks. Know the type of vessels the lender will, or will not.

Maritime companies are often faced with fnding bal- ance between making capital investments in the business and maintaining budgets, and there are multiple options when it comes to vessel fnancing. Choosing a lending pro- vider who takes the time to understand the specifc needs of the business and is experienced in fnancing marine in- vestments is an important part of the equation.

This document is designed to provide general information only and is not comprehensive nor is it legal, accounting or tax advice. KeyBank does not make any warranties regarding the results obtained from the use of this information. Credit 162,000 members products are subject to credit approval, terms, conditions, and availability and subject to change. Key Equipment Finance is a division of KeyBank.