GYC Investors
Investors are a big part of the success of the Gateway fractional program as they provide the funding for those wishing to finance their yacht share. We make it rewarding to invest, offering a much greater rate of return than most fixed investment choices, and your investment is fully collateralized. Additionally, you will be supporting job creation right here in America and you will be doing it without the intervention of commercial banks.
Our aim is to make program entry as easy and painless as possible for our customers, yet still be conservative in our actions. So we created Gateway Yacht Capital, LLC (GYC) in order to make financing possible. GYC matches private investors to customers in a way that benefits each.
This financing is conservative from all perspectives – general terms are as follows; specific terms may vary and are subject to change, on approved credit:
| Financing Terms Table | |
|---|---|
| Minimum Down Payment: | 30% |
| Maximum Loan Duration: | New 7 Years/ Pre-owned 5 Years |
| Interest Rate: | Fixed Rate WSJ Prime +6.5% |
| Return to Investor | Fixed Rate WSJ Prime +5.0% |
WSJ Prime is currently 3.25%, thus the July 2011 APR equals 9.75%. While this rate is slightly higher than conventional new vessel financing, it is necessary to attract and reward private investors, and yet if you run the numbers is insignificant when compared to other ownership alternatives.
From the investor’s perspective, they earn WSJ Prime + 5%, that currently returns 8.25%, a much higher rate of return than is possible on the commercial market – certainly compared to commercial money market rates that are currently returning a miserly 1% to 2% (Current Commercial Rates).
The investor contractually holds the ownership position until the loan is fully paid – and because the loan terms are conservative, this asset should never go “under water,” thus their investment is fully collateralized.
Loan servicing is accomplished by Gateway Yacht Capital who places the loan, provides accounting services, and provides both customers and investors monthly statements.
Rules are important in this relationship, and we want everyone going into it with eyes wide open. In the event of late payment, the following is Gateway’s policy:
- A 10 day payment grace period, afterwards a 5% penalty per month is applied.
- 30 days in arrears results in the inability to use your vessel.
- 60 days in arrears results in the inability to schedule your vessel, notice of default is issued.
- 70 days in arrears results in the share being listed for sale contingent upon continued default.
- 90 days in arrears results in contractual forfeit, the share is then the property of the Investor and resale can then be closed.
We believe this is a terrific opportunity for investors as they receive a high rate of return with a real asset as collateral. It’s terrific for fractional owners as they can get into their dream vessel not only for a fraction of the cost, but also for a fraction of the down payment and monthly installments.
Further, in order to entice investors, anyone who purchases a Gateway share and also finances an equal or greater share, will receive a 3% discount on their Nordic or Aspen share, or 5% off their Hewescraft share. This results in the first year returning up to 13.25% APR to the investor at current rates!
And what could be better than giving conventional bankers the old Heave Ho!? Now that will put a smile on your face…
