Karen Trostle, the new president of the National Marine Bankers Association, has a message for lenders: Now is a good time to get involved with boat loans.
"The collateral values are the lowest that I've seen in a long, long time, and if the people themselves have been able to keep their income consistent - if they've weathered through '07, '08 and '09 - they're going to be a good credit risk," she says. "[Boat loans] are one of the best loans on a bank's portfolio. They are a great cross-sell opportunity for other services."
One of Trostle's main goals for the coming year is to get this message out to lenders and get more of them writing boat loans. The banks that are in business now are the ones that survived the worst of the economic downturn; they are the strong institutions, she says.
"The National Marine Bankers Association is going to have a pointed marketing campaign to teach those consumer lenders that are in business, that have liquidity on their balance sheet, that need to put money into loans - and we're going to talk with those folks and tell them all of the important facts about a boat loan," she says.
Trostle, who recently took over as president from Jim Coburn, is confident that new retail lenders will come into the marketplace in 2010, though she admits it will take more time to bring new floorplan lenders into the industry. As for her other goals, Trostle says she wants to do more public outreach to let people know there is money out there for boat loans. The NMBA, she says, will work to educate the public on what they need to do to get approved and will encourage preapproval.
The association also will continue its work with the National Marine Manufacturers Association on such legislative issues as initiatives to standardize state titling. This is in addition to the group's two major conferences: an annual lending conference in the fall and a marine lending workshop in December.
The NMBA marked its 30th anniversary last year. Membership includes financial institutions such as commercial banks, private financing firms, savings and loan companies, credit unions and retail service companies. Members must extend or originate credit to consumers, retailers/dealers and manufacturers of recreational boats and equipment.
Trostle, 55, has worked in marine lending for more than 30 years. After graduating from high school in 1973, she went to work at Maryland National Bank and was employed by the bank while attending the University of Maryland and the Graduate School of Retail Bank Management at the University of Virginia. She worked in the bank's consumer lending area, working her way up to vice president of sales, where she oversaw 12 loan production offices around the country. After the birth of her son, Trostle formed Sterling Acceptance Corp., an Annapolis, Md.-based loan origination company that has been in business for 23 years and also has offices in Florida and California.
Trostle says she has seen her share of ups and downs in the industry, such as the stock market crash in the late 1980s and the luxury tax in the early '90s, but she agrees with those who say this latest downturn is likely the worst in recent history. "I think it's just like the perfect storm, where so many things came together at the same time with the housing market, the stock market," she says. "Everything just kind of came together, and boat purchases and boat loans pretty much just came to a halt in the fourth quarter of '08."
But, she says, the industry isn't dead and gone. Far from it. "We are starting to see some optimistic signs that maybe we're getting close to a bottom and maybe in the first half of this year we'll start to see an uptick," she says. "It will be small, but there are signs."
Trostle says inquiries for information have been increasing. "There are people wanting to get preapproved," she says. "It's been pretty rampant that there's not money available to buy a boat, but that is not true. Qualified people are getting boat loans today."
The days of loans with no money down are over, she says, but today's lending practices are no more restrictive than they were 20 years ago. They're just more restrictive than three or four years ago.
"I think the primary problem is that there aren't qualified people looking to buy boats," Trostle says. "The small businessman, who I would say is a good part of the bread-and-butter market of boats, they are the ones that are taking it on the chin in this economic downturn. As business turns around, we'll see them come back."
This article originally appeared in the March 2010 issue.