Boat loans for a US citizen/non-citizen couple

[Tenedos]

After a lot of searching, we found a boat that we really like (Jeanneau 43 DS). We have an accepted offer and we are in the process of looking for a loan. Complication is that we are a US citizen/non-citizen couple.

Looks like lenders require boats to be Coast Guard documented and you have to be a US citizen as an owner of a Coast Guard documented boat. One lender we talked to is proposing that the US citizen owns the boat on the paper and we both are liable for the loan. We both would like to be joint owners of the boat.

Has anyone been in a similar situation? Any suggestions?

Thanks in advance.

[Chotu]

Just forget being joint owners. There is no problem with that. Just put it in the name of the US citizen and that’s it. Then leave it alone. This is not a battle you should try to fight.

[S/V Illusion]

That’s why partnerships agreements were invented

[Tenedos]

Originally Posted by S/V Illusion

That’s why partnerships agreements were invented

Thank you. Could you elaborate a bit on this? I think it means putting the boat on the US citizen fully and make a partnership agreement for financial implications on the side. What are the implications of this in difference scenarios?

For example: Getting insurance for the boat, putting the boat in a new marina and registering it there, single handing the boat from one state to another or to Mexico by the non-us partner etc etc (meaning what can and cannot the non-citizen partner do). Note that these are obviously hypotheticals, just wondering what problems a partnership agreement addresses and what it doesn't address.

[S/V Illusion]

Originally Posted by Tenedos

Thank you. Could you elaborate a bit on this? I think it means putting the boat on the US citizen fully and make a partnership agreement for financial implications on the side. What are the implications of this in difference scenarios?

For example: Getting insurance for the boat, putting the boat in a new marina and registering it there, single handing the boat from one state to another or to Mexico by the non-us partner etc etc (meaning what can and cannot the non-citizen partner do). Note that these are obviously hypotheticals, just wondering what problems a partnership agreement addresses and what it doesn't address.

Seeking legal advice on any internet forum and particularly this one isn't the best choice, particularly when contemplating international travel implications. I merely point out that options which address your specific situation exist which pertain to any or all the scenarios you postulate.



Stated differently, to use the common cliche, free advice is worth what you pay...

[goboatingnow]

You’re looking for a boat without any secured finance at this point ?

Forget about joint ownership it just complicates everything

In most cases she’s owns everything anyway !!

[Lost Horizons]

Originally Posted by Tenedos

Any suggestions?

Buy for cash. If you need a loan, you cannot afford it.

[Tenedos]

Originally Posted by goboatingnow

In most cases she’s owns everything anyway !!

Haha, true!

Originally Posted by goboatingnow

You’re looking for a boat without any secured finance at this point ?

We could pay it all cash but would not make that much sense with so low interest rates.

[goboatingnow]

I hope the seller waits

[BillKny]

There is a way around this issue.

You create a Delaware corporation in which the US citizen has a 51% stake, and the foreign national has 49%. The corporation, since is is a majority US controlled, can be the documented owner of the boat. This assumes the non-US owner is OK with a 49% legal ownership stake.

Lots of people can help you do this. Google is your friend.

[ksuderman]

I am going through the same process and Trident Funding will do boat loans for non-US citizens.

[Tenedos]

Originally Posted by ksuderman

I am going through the same process and Trident Funding will do boat loans for non-US citizens.

Thank you, we will call them. I heard this from other lenders too, but then they say boat needs to be Coast Guard documented which requires US citizenship, the two conflict with each other. From their FAQ:

Is US Coast Guard Documentation required for my boat loan?

Boats of documentable size and/or loans over $100,000 typically require USCG documentation (some exceptions apply).

Do you know what their recommendation is in this case?

[ksuderman]

Originally Posted by Tenedos

Do you know what their recommendation is in this case?

No, but I spoke with an agent in their CT office and he said a loan would be no problem. I assume being a non-US citizen is one of the exceptions for requiring USCG documentation.

[ksuderman]

Originally Posted by BillKny

There is a way around this issue.

You create a Delaware corporation in which the US citizen has a 51% stake, and the foreign national has 49%. The corporation, since is is a majority US controlled, can be the documented owner of the boat. This assumes the non-US owner is OK with a 49% legal ownership stake.

Lots of people can help you do this. Google is your friend.

Actually, a non-citizen can own 100% of an LLC that owns the boat. It's just that 75% of the board members must be US citizens. US citizens have to control the LLC, not own it. These guys will help with that if needed.

[Tenedos]

Originally Posted by ksuderman

Actually, a non-citizen can own 100% of an LLC that owns the boat. It's just that 75% of the board members must be US citizens. US citizens have to control the LLC, not own it. These guys will help with that if needed.

Thanks this is helpful. It is interesting though, can't the members change the board members if they want?