Which lenders will finance a superyacht used for commercial charter?

Lombard, Close Brothers and Pegasus all have appetite for commercial or semi-commercial charter vessels. Among private banks, HSBC Private and Investec will consider charter-use vessels on a case-by-case basis, typically requiring the charter business to be well-established and properly certificated under the MCA Large Yacht Code.

Can I reclaim VAT on a superyacht used for charter?

VAT on the purchase and running costs of a superyacht can be reclaimed if the vessel is used for qualifying commercial charter. HMRC typically requires a minimum of 60% genuine commercial use. Vessels used primarily for private enjoyment with occasional charter do not qualify. Specialist marine VAT advisers should be engaged before the purchase.

What MCA certification is required for a charter superyacht?

Vessels over 24m used commercially must comply with the MCA Large Yacht Code (LYC). This requires appropriate safety equipment, crew certification, a safety management system and MCA survey certification. LYC compliance is a prerequisite for commercial charter insurance and is increasingly required by lenders for charter-use vessels.

Does charter income affect affordability assessment?

Yes - most lenders will consider demonstrable charter income as part of the affordability picture, but few will rely on it as the primary repayment source. Charter revenue projections supported by a management company agreement and track record of bookings carry more weight than speculative projections.

What is the best ownership structure for a charter superyacht?

A UK company or offshore SPV (Isle of Man, Malta) is generally more tax-efficient for commercial charter than direct personal ownership. Corporate ownership allows VAT recovery and the deduction of running costs against charter income. The Benefit in Kind implications of personal use must be carefully managed.

Financing a Superyacht as a Charter Business

The Charter Superyacht Finance Market

Financing a superyacht for commercial charter is materially more complex than financing a private vessel. Lenders must assess not only the borrower's personal wealth and creditworthiness, but also the commercial viability of the charter operation - projected revenue, operating costs, charter management arrangements, and the regulatory compliance status of the vessel.

The good news is that several lenders have genuine appetite for well-structured charter superyacht proposals, and the income from charter operations - when properly documented - can support a larger facility and better terms than a purely private finance application might achieve. The key is presenting the business case in the way lenders expect to receive it.

Doulton Bridging Finance works with both private banking and specialist lenders on charter superyacht cases, and we understand what a credible charter finance proposal looks like - and what will immediately raise red flags with an underwriter.

Which Lenders Finance Charter Superyachts?

Lombard

Lombard's most significant differentiator in this market is comfort with commercial charter operations. They will assess charter revenue projections, management agreements and operating cost profiles as part of a holistic case. Finance lease available - useful for VAT management.

Close Brothers

Pragmatic underwriting on semi-commercial vessels. Will consider charter income as part of affordability. More accessible credit criteria than private banks, and faster decisioning (2–4 weeks).

Pegasus Marine Finance

Among the most flexible lenders for charter-use vessels. 75% LTV and 20-year terms are particularly relevant for buyers who need to maximise leverage. Comfortable with older vessels and complex charter histories.

Investec Private Finance

Will consider charter-use superyachts for existing UHNW clients where the charter operation is well-established and properly certificated. Offshore SPV ownership structures for charter vessels are within their comfort zone.

MCA Large Yacht Code: What Finance Requires

For any vessel over 24m used commercially - including for charter - MCA Large Yacht Code (LYC) compliance is not optional. It is a legal requirement and a prerequisite for commercial insurance. Most lenders now require evidence of LYC compliance (or a clear path to it) before advancing funds for a charter-use vessel.

LYC compliance involves:

MCA Load Line survey and certification
Safety management system (SMS) approved by MCA
Crew certification to STCW standards (minimum OOW and Engineering Officer with relevant tonnage ratings)
Life-saving and firefighting equipment to LYC specification
Stability documentation and safe manning certificate

For vessels not yet LYC compliant, lenders will typically require a professional assessment of the scope and cost of compliance work before making an offer. Where significant compliance work is required, this cost should be factored into the overall finance requirement.

VAT and Tax for Charter Superyachts

VAT Recovery on Purchase

A superyacht used for qualifying commercial charter can recover the 20% VAT on the purchase price - a significant sum on a £2m vessel (£400,000). HMRC requires that the vessel is genuinely held and used for commercial purposes, with a minimum charter use ratio typically in excess of 60%. A charter management company agreement, booking history and properly maintained logs of use are essential for a successful VAT reclaim.

Running Cost VAT

Ongoing running costs (fuel, maintenance, crew wages, mooring fees, insurance) can be reclaimed as input VAT in proportion to the commercial use ratio. This is a meaningful ongoing saving - total annual running costs for a 30m–40m superyacht typically run to £250,000–£500,000+ per year.

Corporation Tax on Charter Income

Charter income received by a UK company is subject to corporation tax, currently 25% for profits above £250,000. Running costs, depreciation (capital allowances) and finance costs are deductible, meaning a well-structured charter operation may pay little or no corporation tax in the early years of asset ownership.

Benefit in Kind

If a company-owned charter vessel is used personally by directors, HMRC will assess a Benefit in Kind charge based on a percentage of the vessel's value. Proper documentation of commercial and private use ratios is essential. Many operators structure their use to remain below the threshold that triggers a meaningful BiK liability.

Worked Example: £2m Charter Superyacht Finance

Scenario: UK company purchasing a 32m motor yacht for Mediterranean charter

Buyer: UK-resident HNW individual purchasing through a UK company (newco). Clean credit, personal net worth £3m. Experienced in property but first superyacht purchase.

Vessel: 2016 32m Italian motor yacht, Italian flag, BV classification current. Purchase price £2,000,000 + VAT (£400,000). Charter management agreement with Monaco-based operator. Projected charter revenue: £180,000 per year. Running costs: £220,000 per year. Net operating deficit before finance: £40,000 per year.

Finance Recommendation: Close Brothers (via Doulton Bridging Finance)

Rate: 6.2% APR (charter-use vessel, corporate borrower, strong personal guarantee)
LTV: 70% against purchase price (excluding VAT) - facility: £1,400,000
Term: 15 years
Monthly payment: approximately £12,000
Annual finance cost: approximately £144,000
Total operating cost (running + finance): approximately £364,000
Less charter income: £180,000
Net annual cost: approximately £184,000 (before VAT recovery and tax relief)

After VAT Recovery and Tax Efficiency

VAT on purchase recovered (Year 1): £400,000 - significant cash flow benefit
Running cost VAT recovery (ongoing, 70% commercial use): approximately £28,000/year
Corporation tax relief on finance costs and running costs: approximately £40,000/year
Net economic cost after tax and VAT: approximately £116,000/year

In context: A 32m superyacht for £116,000 net annual economic cost (after all tax benefits) is a compelling proposition for an HNW individual who values Mediterranean access and the lifestyle benefits of superyacht ownership. The vessel also represents an appreciating (or at least value-retaining) asset in the current superyacht market.

What Lenders Want to See in a Charter Finance Application

A credible charter superyacht finance application should include:

Personal financial statement: Full net worth, income, existing liabilities and credit profile of the individual borrower / guarantor
Company accounts: For corporate purchasers, 2–3 years' accounts where available (or a business plan for newco)
Charter management agreement: From a recognised charter management company - essential for credibility
Revenue projections: Charter bookings or realistic market-based projections supported by the management company
Operating budget: Detailed annual running cost budget
Vessel survey: Current condition survey and classification certificate
MCA compliance plan: For vessels not yet LYC compliant, a costed pathway to compliance
Marine insurance: Confirmation of commercial hull and P&I cover from a recognised insurer

Doulton Bridging Finance assists clients in assembling and presenting these documents in the format that lenders expect. A well-packaged charter finance proposal significantly reduces the risk of a decline or a request for further information that delays the transaction.

Financing a Superyacht as a Charter Business: Complete Guide