When the Small Business Administration announced a new dealer floorplan loan program in early June, it was heralded by industry leaders as a breakthrough in solving the credit crunch plaguing the marine industry.
Since then, many dealers have complained that the program does them no good because they can't find any SBA-approved lenders that offer floorplan financing.
Industry leaders continue to praise the program, however, and say dealers need to put more effort into educating the banks about floorplan financing and about their business.
"We really do feel the SBA floorplan loan program is a first step in improving access to credit for dealers," says Cindy Squires, legislative counsel for the National Marine Manufacturers Association. "It is going to be a process of educating a lot of regional banks. "It's not going to be a matter of just flipping a switch."
As of July 1, dealer floorplan loans were available for a minimum of $500,000 up to $2 million under the SBA 7 (a) loan program. With a maximum repayment term of five years, the loans will come with a 60 to 75 percent government guarantee.
Jim Coburn, president of the National Marine Bankers Association, says dealers need to develop a game plan.
"Look for those who are SBA-approved, make an appointment to see them and tell them about your business and your industry," Coburn says. "Have a business plan and have your data with you. Some of these banks don't really know what floorplan lending is. It does take a lot of work on the dealer's part to get this done. It is relationship building."
- Melanie Winters
Tiara Yachts moves into wind energy industry
The owners of Holland, Mich.-based Tiara Yachts are branching out with the formation of Energetx Composites, which plans to manufacturer wind turbine blades, nacelles and spinners for use in large utility turbine applications.
"Energetx Composites is uniquely positioned to provide precision engineering and world-class manufacturing capacity in an optimal geographic location to effectively supply advanced composites for the growing wind energy industry in Michigan, the Great Lakes and internationally," principal David Slikkers, who also is president of Tiara Yachts, said in a statement.
Wind turbines require the same kind of composite fabrication as boatbuilding.
Though the new company was launched last summer, it is now in the process of securing contracts and work, and hopes to begin production and hiring closer to the fall, spokesman David Walsh said in an e-mail to Soundings Trade Only.
Walsh said the company expects to generate 1,068 jobs in the next five years, in addition to 1,500 indirect jobs the state expects to be created as a result of the company's anticipated growth.
"We are producing boats intermittently, but many of our employees are currently on furlough as we see field inventories begin to come in line with realistic retail activity," Walsh said.
- Beth Rosenberg
YachtWorld.com forms partnership with YBAA
YachtWorld.com and the Yacht Brokers Association of America signed a collaborative agreement to promote professional yacht brokers' services to YachtWorld.com visitors and member brokers around the world.
The goal is to increase the level of professionalism within the brokerage industry via broker education and provide the public with more accurate listing information. YachtWorld will use its broker communication network to educate its members with professional standards developed by YBAA and YachtWorld.
"This collaboration with YBAA will raise the visibility of listings that are represented by Certified Professional Yacht Brokers credentialed yacht brokers and will educate buyers and sellers as to the identity and value of working with a certified yacht broker," said Ian Atkins, vice president and general manager of YachtWorld.com and Boats.com, in a statement.
YBAA president David Pugsley says his organization teamed up with YachtWorld "because of their extraordinary track record and ability to help yacht brokers promote and co-broker their listings to buyers around the world.
YachtWorld.com and Soundings Trade Only are divisions of Dominion Enterprises.
BoatTrader.com opens wholesale channel
BoatTrader.com recently launched a dealer-to-dealer wholesale channel that allows dealers to buy and sell excess inventory within the Boat Trader dealer network. Dealers can track lead response while managing and modifying their wholesale inventory.
"The development and launch of the dealer-to-dealer wholesale channel could not have come at a better time," said David Bingham, general manager of BoatTrader.com, in a statement. "Customers that have listed their wholesale inventory with BoatTrader.com's Wholesale Tool have seen significant results."
Marine dealers in the Boat Trader network will have immediate access to the dealer-to-dealer wholesale channel, located in the Inventory Management Tool. This will allow them to move inventory across markets and to locations where the inventory is in demand.
Marine retailers not presently with BoatTrader.com are invited to join the Boat Trader Dealer Network to showcase their current inventory to more than 1.5 million consumers each month and gain immediate access to the wholesale channel and its inventory.
BoatTrader.com and Soundings Publications are both divisions of Dominion Enterprises.
Raymarine, Fountain, BRP raising capital
Manufacturers in varying sectors of the marine industry are making moves to survive and eventually thrive in the new economy.
- Bombardier Recreational Products and the controlling shareholders of its parent company reportedly have raised $115.9 million to further strengthening BRP's financial position through these difficult economic times.
BRP raised $26.7 million of reimbursable funds from Investissement Québec to support the company's research-and-development activities. Another $89.2 million was raised by BRP's controlling shareholders and their affiliates, including a $44.6 million loan from the Société générale de financement du Québec to support BRP's operations.
"With these additional funds, we will have the option of buying back our debt and we will be in a position of even greater strength to take advantage of opportunities when the global economy is back on track," said José Boisjoli, BRP president and CEO, in a statement. "We need to adjust to new business conditions resulting from the world economic crisis, while supporting our network and maintaining our brands through innovation."
- Raymarine says it is exploring equity fund-raising or a sale of the business and, in the absence of either, will seek to secure additional medium-term debt facilities with its banking group.
"In the U.S., sales have remained at depressed levels as both OEMs and retail channels continue to de-stock," the company said. "In the U.K. and the rest of the world, sales were slightly weaker than expected. Many OEMs are now shut for an extended summer break with indications that they plan to restart production right again in the autumn."
Given the decline, Raymarine has implemented a number of programs to mange its costs, resulting in a significant reduction in operating costs and a consolidation of all the company's U.K. operations to one site, the company says.
- Fountain Powerboat Industries Inc. has retained investment banker Jacobs Capital to help the boatbuilder find a partner that can provide additional capital to get through the economic downturn and finance future growth.
"The present market for boating is not immune to the same forces impacting the auto industry and the overall economy," said Reggie Fountain, chairman and CEO, in a statement. "Fountain Powerboats is one of the premier brands in the powerboat industry, and we plan to be a survivor of the current industry shakeout. We have unparalleled customer loyalty, which has allowed us to see less falloff than most of our competitors.
"From experience, we know the companies that come through this recession will be poised to capture even greater market share," Fountain added.
Apex takes over Allied service yard
South Florida businessman Ismael "Issy" Perera has taken over operation of Allied Marine's service yard in Fort Lauderdale.
Perera, a retired corporate executive living on Key Biscayne, Fla., is the owner and president of Apex Marine, which launched operation of the site June 1. He negotiated a five-year lease with the Related Group - the owner of the property - and purchased certain assets, including all equipment, tools and parts currently on inventory, from Allied.
Terms of the agreement were not released.
"This now a full-service boatyard open to all boat owners," Perera said in a statement. Depending on the size of vessels being serviced, Perera says the yard can handle repairs on about 14 boats simultaneously.
Service manager Bill Dalton has stayed on with the company as vice president of service.
As Apex Marine, the yard will provide service and repair for yachts of 30 to 85 feet. The yard has a spray booth for exterior painting and also will provide a full gamut of mechanical and electrical services, including repowering and interior refits.
"Our focus will be to provide the best possible and most dependable service to our customers. As a boat owner, I think that is sometimes lacking," says Perera. "If we say your boat will be ready on a certain day, it will be ready."
Government orders boost recreational boatbuilder
Fort Lauderdale-based Midnight Express Powerboats reports it has maintained full production throughout the year with contracts to build customized pursuit and interdiction vessels for security and training purposes.
A U.S. Navy contract concluded this spring calls for Midnight Express to provide the Navy with 14 of the company's 39-foot Interceptors, boats that are already in service with U.S. Customs and Border Protection.
In addition to supplying these fast and versatile boats to the Department of Homeland Security and U.S. Customs and Border Protection, the company is negotiating with a number of government agencies in other nations that are seeking ways to protect the sea lanes that border their shores.
PJ delivers pair of 150-foot yachts
Yacht builder Palmer Johnson recently made back-to-back deliveries of its 150-foot Super Sport Yacht Series.
Blue Ice, hull No. 5, and Oneness, hull No. 6 of the 150-foot series, will both sail the Mediterranean this summer along with other recent launches.
Palmer Johnson says its growth has been "off the charts" since 2004 because of the "immediate and overwhelming response" brought by the new Sport Yacht concept, which started with the 120-foot Coverdrive. Palmer Johnson has now delivered seven 120-footers, four 135-foot yacht, six 150-footers and three of the company's 123-foot GRP Fly series yachts.
The Wisconsin company is keeping busy with 150-foot hull Nos. 7 and 8, as well as 135-foot hull No. 5, a 170-foot Mega Sport Yacht and an 82-meter Global Explorer.
Trade Only writers receive APEX Award
Soundings Trade Only was honored with an APEX Award of Excellence in the Financial and Investment Writing category.
The award was for a package of articles that ran in the November 2008 issue, written by associate editor Beth Rosenberg and freelance writer Reagan Haynes called, "Turbulent Waters."
Rosenberg's article was called, "Will the 'bailout' have buoyancy?" and Haynes' article was titled, "Marine finance upheaval squeezes dealers."
"These articles provide a clear snapshot of what was happening in the financial markets this fall, and how these historic events affected the boating industry," says Soundings Trade Only editor Bill Sisson. "Since the recession started, we have worked hard to give our readers the up-to-date information and analysis they need to guide them through these turbulent times."
According to APEX organizers, there were about 3,785 entries in 122 categories for this year's awards.
Yanmar offers rebate program
Yanmar Marine USA Corp. is offering an instant rebate program on engine repowers that could save boaters up to $1,700 per engine.
Available through participating Yanmar dealers/distributors in North and South America, the Yanmar Instant Rebate program is for retail repower engine sales between now and Aug. 31. The rebate will be deducted from the final invoice.
"The plan is to give a pleasure boat customer who is thinking about repowering a reason to act now," special projects manager Greg Eck said in a statement.
Customers can save $200 on the YM Series, $300 on the JH Series, $500 on the BY Series, $700 on the LP Series, $1,000 on the LY Series, $1,300 on the CX Series and $1,700 on the SY Series.
This article originally appeared in the August 2009 issue.