Coyote Blog

As a small business, there is just about no way to get a bank loan based on cash flow -- not just on future projections of cash flow, but even just based on a history of strong cash flows in the company.  This is not particularly new post-financial-crash... I wrote about this issue years ago.

In contrast, it is fairly easy to get equipment financing.  I get 10 calls a week from folks trying to finance my equipment purchases.  If they can slap a lien against a moveable asset, people will lend money.  The only change I have noticed of late is that fewer of these folks will do titled assets (like road vehicles).  This is kind of ironic, since they can perfect their lien on titled assets more strongly, but apparently the government paperwork hassles with titles makes lending expensive for these assets.

The one exception to this is for boats.  We would like to buy a bunch of new pontoon boats for rental service at some of our lakeside marinas.  Pontoon boats are great assets - they have fast payback, they are tanks so they last forever, and they don't go very fast so they don't usually get in accidents.  But no one will touch boat lending.  Apparently there is too much liability for lenders.  Which is just crazy, when you think about it.  How in the world have we created a tort structure where Bank X is somehow liable for the actions of a boat user that gets hurt, just because Bank X lent the money for our company to buy the boat and then rent the boat to the user?\

Anyway, if anyone knows someone who finances such commercial boat purchases, drop me an email.