General Yachting & Leisure Finance works with major industrial groups to offer flexible financial products that provide operational benefits for clients
by Angelo Colombo
We met Sylvain Bard, general manager at General Yachting & Leisure Finance Italia, a finance company operating in the yachting and boating sector. The firm works with other companies in Spain, the UK, and Germany to develop financial solutions that meet the needs of every single one of its clients in ten European countries.
GY&LF IS BASED IN ROME, WHERE IT OPENED NEW OFFICES IN 2020, JUST BEFORE THE PANDEMIC STRUCK. NEVERTHELESS, ITS OPERATIONS CONTINUED UNABATED, INCLUDING HIRING TWO EXTRA STAFF IN THE COMMERCIAL SECTOR AND TWO NEW AGENTS.
GY&LF is registered with the OAM (the Italian body responsible for managing financial agents and credit brokers) and also has exclusive distribution rights in Italy for the brands CGI FINANCE and SGB FINANCE. Its financial products include some tailored specifically to seafarers. The company is based in Rome, and opened new offices there in 2020, just before the pandemic struck. Nevertheless, its operations continued unabated, including hiring two extra staff in the commercial sector and two new agents. As Sylvain Bard told us, 2021 was undoubtedly the 30-strong Italian CGL Group team’s most successful year. Asked about the second-hand market, he replied: «It’s certainly a very interesting topic because we ended up with very few new boats being produced at the same time as demand was growing, with lots of people wanting to head out to sea. In the five years leading up to 2021, the second-hand market accounted for between 12% and 15% of
our business, whereas last year it was over 30%».
GY&LF engages in dialogue both with the direct client and with the SGB CGL (Groupe Bénéteau) network, as well as interacting with the Italian Ship & Yacht Brokers Association (ISYBA), which offers the support of a qualified marine broker.
GY&LF works closely with shipbuilders, sellers, dealers, and brokers, and is a member of Confindustria Nautica (the association representing the Italian marine industry). The firm focuses in particular on nautical leases, with contracts averaging €200,000. 2022 is the first year without the so-called “flat-rate” VAT scheme for leases, but GY&LF has already created a new Italian lease system for its clients, and this is proving popular with boat owners. «A point I keep returning to – one which I think is worth highlighting – is the great opportunity provided by having a clear set of rules for financing second-hand boats. I’m convinced that this market will grow considerably over time, as suggested by the jump in new boat sales, which means used boats coming onto the market now and inevitably more arriving later. We are living through a period of change, and the signs are clear to see: we believe we need to take advantage of the situation with financial solutions that support the demand for both new and used boats. That’s why we offer both mortgages and refinancing options for used boats». GY&LF engages in dialogue both with the direct client and with the SGB CGL (Groupe Bénéteau) network, as well as interacting with the Italian Ship & Yacht Brokers Association (ISYBA), which offers the support of a qualified marine broker. For new boats, the company offers flexible products tailored to clients’ specific needs that ensure they pay the correct VAT rate for the use they plan to make of the boat. GY&LF’s highly trained team is well versed in interpreting a very complex piece of legislation.
Sylvain continues: «I believe the Italian legislation sought to propose similar rules to the previous system but based on honesty. To explain: when assessing a financial instrument, the client forecasts the annual use of the boat they are purchasing. If they tell the Italian Revenue Agency that they plan to use the boat 50% of the time, i.e. for six months of the year, we prepare the contracts with their official declaration and then handle the VAT refund if they use it less or the supplementary payment if they used it more. Naturally, the client must keep all receipts to confirm the trips they took, as this is the only way we can calculate the correct amount of VAT due». Regarding the new rules, he adds: «I believe Italian lawmakers were well aware of the risks to the Italian boating industry, as they have tried to find a system that is acceptable in Brussels but that does not force larger vessels out of Italy. As a result, I think the system should work very well. There may be small disputes, perhaps even over a single week of actual use, and these always need to be borne in mind: let’s just say that we may need a bit of time because, as I mentioned before, the law is not easy to explain and this also applies to leasing used boats».
2022 IS THE FIRST YEAR WITHOUT THE SO-CALLED “FLAT-RATE” VAT SCHEME FOR LEASES,
BUT GY&LF HAS ALREADY CREATED A NEW
ITALIAN LEASE SYSTEM FOR ITS CLIENTS,
WHICH IS PROVING POPULAR WITH OWNERS.
With used boat financing there are usually age limits for the vessels, but GY&LF can offer new financial rules that allow it to finance boats up to 20 years old, assuming they are in a good state of repair. «In the USA, for example, they have always had financial instruments with much longer terms than ours, and it seems the system works, so we want to adapt to these market trends and be the first to offer financial tools that suitcases like this. We have credit lines for commercial operators to finance both stocking new boats and buying used boats. Our slightly higher rates are justified by the instrument that also allows us to resell to the end client, creating a full circle. We may lose some contracts because of it, but we aim to guarantee continuity and offer the client a transparent relationship. For example, you can run all the financing simulations completely independently on our website, and understand the rules of the lease product you are choosing. You can also print all the lending examples to associate them with the sales documents. The market is changing, and we need to adapt to it. We believe that, as well as offering financial products, we also need to support dealers and the sales network with solutions equipped to deal with the changing demands».
WITH USED BOAT FINANCING THERE ARE USUALLY AGE LIMITS FOR THE VESSELS, BUT GY&LF CAN OFFER NEW FINANCIAL RULES THAT ALLOW IT TO FINANCE BOATS UP TO 20 YEARS OLD, ASSUMING THEY ARE
IN A GOOD STATE OF REPAIR.
As well as leasing in Italy and the second-hand market, for over six years GY&LF has also been working a great deal, and with growing success, in the charter sector. Although some large international firms with bases spread across the world have suffered greatly as a result of the pandemic, small and medium-sized Italian charter companies rode the crisis out expertly, and these are the businesses on which GY&LF continues to focus its work. The main issues now are rising costs and interest rates, which have been increasing since September last year. «We can’t yet tell whether it’s only a blip or something more long-term. It could just be a change of mindset, after many years with very low rates. The issue in 2022 is the increased cost of money: we have to explain it to our clients, especially because we choose to only work with fixed rates, but we are trusted within our sector and this allows us to be competitive even when rates are rising. We attend the main marine events: we have always had a stand at the Genoa Boat Show, and for years we were the only firm in our sector there. This provides reassurance, as, I believe, does the fact that we specialise in the nautical sector. Our constant presence at the boat shows, even when others did not turn up, led to some extremely valuable relationships with people who are still loyal customers today». Overall, flexibility and a willingness to develop tailored products have proven vital in developing beneficial relationships with all types of clients.
(Sylvain Bard – GY&LF Italia, Tailored Finance – Barchemagazine.com – September 2022)