Ever wondered how the super rich finance their superyachts? I mean, we’re talking about floating palaces worth £100 million, £200 million, sometimes over £500 million. Do they just write a cheque? Take out a mortgage? Or is there something more complex at play?
Recently, I sat down with Olivier, a leading financier in the superyacht industry, to pull back the curtain on exactly how billionaires finance their superyachts. What we discovered might surprise you—because even with hundreds of millions in the bank, the ultra-wealthy rarely pay cash.
Why? Because there’s a far smarter game being played. From superyacht financing structures that go up to 85% loan-to-value, to leveraging private banking relationships for rates as low as 2-4%, the strategies used by UHNWIs are both brilliant and accessible—if you know where to look.
Understanding Superyacht Costs: It’s Not What You Think
Let’s start with the basics. When we talk about superyacht financing, the game changes dramatically depending on the size of the vessel you’re looking at.
For a 20-meter yacht, you’re looking at anywhere between £5 million to £15 million. These are impressive vessels, but they’re the entry point to the superyacht world.
Once you move above 80 meters? We’re talking hundreds of millions of dollars. A recent Oceanco build—an absolutely stunning vessel over 60 meters—will set you back £200 million or more. And at that level, how you finance a superyacht becomes as important as the yacht itself.
Valuation Rule of Thumb: For yachts above 70-80 meters, you can roughly estimate £1 million per meter as a general guide. Below that size, it’s typically between £500,000 to £800,000 per meter—though brand, specification, and age all play massive roles.
Why Would Billionaires Finance a Yacht? The Leverage Strategy
Here’s the question that stumps most people: why on earth would someone with £200 million in liquid wealth borrow money to buy a yacht?
After all, superyachts generate negative cash flow. You’re not only paying interest on the loan, but you’re also covering running costs that can easily hit 10% of the yacht’s value annually. Crew salaries, fuel, maintenance, insurance, mooring fees—it all adds up fast.
But here’s the genius of it: opportunity cost.
The Positive Carry Trade
Let’s say you can borrow at 3-5% through private bank financing. Meanwhile, you’re generating 20-30% returns through private equity investments or your business ventures. That’s a positive carry—you’re making significantly more on your capital than it costs to borrow.
Entrepreneurial clients—the ones who’ve made fortunes taking calculated risks—are extremely comfortable with this type of leverage. They’d rather keep their £200 million working hard in investments while the bank finances their yacht.
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Financing a New Build: The Shipbuilding Contract Strategy
One of the most fascinating areas of yacht construction finance is funding a custom build. And let me tell you, this is where things get really interesting.
Building a superyacht from scratch takes 2-3 years. During that entire period, you don’t have a yacht—you have a contract. Admittedly, it’s 100 pages of detailed specifications, but it’s still just paper.
Meanwhile, you’re writing cheques for £10 million, £20 million, sometimes £100 million before you ever see your vessel in the water. That’s a lot of capital tied up with significant performance risk. What if the shipyard doesn’t deliver? What if specifications aren’t met?
How Banks Mitigate Build Risk
This is where financing a new build yacht becomes brilliant. By bringing a bank into the construction process, you’re essentially sharing the performance risk. The bank has a vested interest in ensuring the shipyard delivers exactly what was promised, to specification, on time.
Banks will monitor the build, inspect progress, and leverage their relationships with the shipyard. It’s like having a heavyweight financial institution watching your back throughout the entire construction.
For new builds, banks can typically provide 40% to 85% financing depending on several factors—which shipyard you’re using, what brand of yacht, where it’s being built, and of course, your banking relationship.
Top Superyacht Builders and Their Financing Appeal
- Feadship (Netherlands): Premium financing terms, excellent resale liquidity
- Lürssen (Germany): Bespoke quality, strong lender confidence
- Oceanco (Netherlands): Modern designs, robust build quality
- Benetti (Italy): Heritage brand, good secondhand market
- Heesen (Netherlands): Performance yachts, strong following
Watch: How to Finance a Superyacht
In this exclusive interview, I sit down with Olivier, a leading superyacht financier, to discuss loan-to-value ratios, private bank relationships, and the strategies ultra-high-net-worth clients use to finance vessels worth hundreds of millions.
Superyacht Loan to Value Ratios: How Much Can You Actually Borrow?
This is where yacht loans for ultra high net worth individuals get fascinating. The superyacht loan to value ratio varies dramatically based on several key factors.
The Dry Lender vs. Relationship Lender
First, you need to understand the difference between a “dry lender” and a relationship-based lender.
A dry lender will lend purely on the strength of the yacht as collateral. They’re not interested in your wider banking relationship—just the asset. These are rare in the superyacht world, though I know of one bank in Taiwan that operates this way. The challenge? Getting £125 million on a £250 million yacht with no wider relationship is incredibly difficult.
Most superyacht financing operates on a global banking relationship model. This means the bank wants to see a comprehensive financial relationship with you—not just the yacht loan.
The 50% Rule
Here’s how it typically works for a high-value superyacht:
Let’s say you’re buying a £200 million yacht and want 50% loan to value. The bank will lend you £100 million. But they’ll also want to see around £50 million in assets under management with them—essentially 50% of the loan value on the credit side of the balance sheet.
This could be investment portfolios, structured products, or other managed assets. It’s about creating a balanced relationship where the bank is servicing both sides of your balance sheet.
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Up to 85% Financing: When It’s Possible
Now here’s where things get really interesting. Under the right circumstances, private bank yacht financing can go as high as 85% loan-to-value.
When does this happen? Typically on yachts up to 60 meters, when:
- The brand has exceptional liquidity in the secondhand market (think Feadship or Lürssen)
- You have a reputable project manager overseeing the build
- Your crew management is top-tier
- You maintain a substantial private banking relationship
At this level, the bank is extremely confident in both the asset’s liquidity and your profile as a client. They know that if something goes wrong, they can sell that Feadship relatively quickly without taking a massive loss.
Why Brand and Liquidity Matter So Much
One thing Olivier emphasized that I think is absolutely critical: superyacht brands and resale value aren’t just vanity metrics—they’re fundamental to your financing terms.
Unlike property, which can generate rental income, superyachts are negative cash flow assets. You can’t rent them out easily (charter is possible but complex), and they depreciate. The only financial upside is resale value.
This is why banks scrutinize the secondhand market so carefully. How long does it take to sell a particular yard’s yachts? What’s the typical discount from asking price? Are buyers actively looking for that brand?
I’ll be honest—if you’re looking to finance a yacht from a Chinese shipyard, you’re going to struggle. There simply aren’t established Chinese brands with strong secondhand liquidity. Compare that to a Feadship, which can sell in months with minimal price negotiation, and you see why banks favor certain builders.
The Critical Importance of Crew Management
Here’s something that surprised even me: sophisticated lenders dig deep into crew management and yacht value preservation.
Your captain, your chief engineer—these aren’t just employees. They’re the custodians of a £100 million+ asset. The chief engineer, working away in what Olivier called “the bat cave,” is responsible for engines, mechanical systems, and overall technical integrity.
Get this wrong, and a £200 million yacht can quickly need £20 million in repairs. Get it right, and you’re preserving—or even enhancing—the asset’s value.
Banks lending serious money ask about your crew during due diligence. It’s not enough to have a beautiful yacht; you need the right people maintaining it.
Blended Facilities: The Sophisticated Approach
For clients with substantial wealth, blended lending facilities offer the most attractive terms.
A blended facility means the bank takes collateral from multiple sources—not just the yacht. They might take a charge over your investment portfolio (assets under management) and the yacht itself.
Why does this help? It’s like buying multiple products from the same supplier. The more business you do with the bank, the better your pricing. Your interest rate drops. Your loan-to-value ratio increases. Your terms become more flexible.
I’ve seen clients combine yacht financing with investment management, structured products, and even their corporate banking relationship—all with one private bank. The economics make sense for everyone.
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The Private Banking Relationship: What It Really Means
When banks talk about wanting a “relationship,” what exactly do they mean?
It’s not just warm feelings and Christmas cards. A private banking relationship in the superyacht financing world means the bank wants to see you using their balance sheet on both sides.
On the liability side, they’re lending you money for the yacht. On the asset side, they want to see you investing through them—wealth management, structured products, portfolio management, maybe even corporate and investment banking services if you’re an entrepreneur.
The relationship needs to be balanced. They’re not going to lend £100 million for a yacht if you have nothing else with them. But if you’re investing £50 million through their private banking arm? Now we’re talking.
And crucially, they’re looking for long-term relationships. This isn’t a transactional, one-and-done scenario. They want clients who’ll be with them for decades, potentially across generations.
Secondhand Market Financing vs New Builds
Secondhand yacht financing operates slightly differently than new build contracts, though the fundamental principles remain the same.
With a secondhand purchase, you’ve got an existing asset with a proven track record. The bank can inspect it, survey it, review maintenance logs, assess the crew’s track record. There’s less uncertainty than with a three-year build process.
However, you typically can’t achieve the same LTV ratios on secondhand yachts unless they’re very recent builds from premium yards. A five-year-old yacht, even from a top builder, might max out at 65-70% LTV compared to 85% on a new build.
That said, secondhand purchases often close faster. With new builds, you’re financing in stages as construction progresses. With secondhand, it’s a single transaction—closer to how property works.
Real Numbers: What Does Superyacht Financing Actually Cost?
Let’s talk actual numbers for yacht finance options:
Typical Superyacht Financing Terms
- Interest Rates: 2-5% depending on relationship depth and loan structure
- Loan Term: 5-15 years (though many refinance earlier)
- Loan-to-Value: 40-85% depending on brand, build status, and relationship
- Required Equity: Minimum 15-60% of yacht value
- Associated Relationship: Typically 25-50% of loan value in managed assets
For a £100 million yacht at 50% LTV with a 3.5% rate over 10 years, you’re looking at roughly £500,000 per month in repayments. Add annual running costs of 10% (£10 million), and your all-in cost is around £16 million per year.
Is that expensive? Absolutely. But if your £150 million of investments are generating 15% returns (£22.5 million annually), the yacht becomes financially viable—or at least, financially rational within the context of your overall wealth.
The Bottom Line on How Billionaires Finance Superyachts
So, how do billionaires finance their superyachts? Through a sophisticated combination of leverage, private banking relationships, and strategic asset allocation.
They don’t pay cash because that would mean liquidating investments that are generating superior returns. Instead, they borrow at attractive rates—2-5%—while keeping their capital deployed in higher-yielding opportunities.
They structure deals through private banks that provide 50-85% financing in exchange for a broader financial relationship. They choose premium yacht builders not just for quality, but because brands like Feadship and Lürssen offer better financing terms due to superior resale liquidity.
And they think long-term. This isn’t about getting the cheapest loan—it’s about building relationships with financial institutions that will support all aspects of their wealth, from superyacht financing to investment management to corporate banking.
Is Superyacht Ownership Right for You?
If you’re considering superyacht ownership, the financing is only one piece of the puzzle. You also need to think about:
- Annual running costs (budget 10% of yacht value minimum)
- Crew salaries and management
- Mooring and berthing fees in premium locations
- Insurance and regulatory compliance
- Depreciation (typically 10-15% in first year, then 5-7% annually)
But if the numbers work, and you have the wealth to support it, superyacht ownership offers something money alone can’t buy—absolute freedom on the water, privacy, and experiences that simply aren’t available any other way.
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Frequently Asked Questions
What is the typical loan-to-value ratio for superyacht financing?
Superyacht LTV ratios typically range from 40% to 85%, depending on the yacht’s brand, build status (new vs secondhand), and your banking relationship. Premium builders like Feadship and Lürssen often secure higher LTVs due to better resale liquidity.
How much deposit do you need to buy a superyacht?
Expect to put down 15-60% depending on the financing structure. For new builds from premium yards with strong banking relationships, you might secure 85% financing (15% deposit). For secondhand yachts or less established builders, 40-50% deposits are more common.
What banks finance superyachts?
Major private banks including JP Morgan Private Bank, UBS, Credit Suisse, BNP Paribas, and Lombard Odier all offer superyacht financing for ultra-high-net-worth clients. These typically require substantial private banking relationships beyond just the yacht loan.
Is it better to finance or buy a yacht outright?
For most ultra-high-net-worth individuals, financing makes more sense. At 2-5% borrowing costs, if your investments generate higher returns, you achieve positive carry. Financing also preserves liquidity for other opportunities and, in new builds, provides bank oversight of construction quality.
How does yacht financing work for new builds?
New build financing is released in stages as construction progresses. The bank monitors the build, ensuring specifications are met. This protects you against shipyard performance risk. New builds often secure better LTV ratios (up to 85%) than secondhand purchases because banks are confident in the asset’s condition.
