Marina finance for pontoons, boatyards and marina purchases

Through a revolving credit facility or short term working capital loan, drawn through autumn and winter and cleared when renewals and the boating season bring cash in. Where annual berth contracts renew in spring, a marina can spend the winter paying for lift outs, pontoon repairs, staff and insurance with little arriving. Lenders want monthly cash flow for two or three years, renewal rates, any waiting list, and income from boat storage, repairs, fuel and the chandlery. A marina that sells boats or holds chandlery stock may add stock finance so that buying for spring does not drain the facility. We look for a limit and a review date that follow the marina's own calendar.

Do marina berth fees include VAT?

Normally yes. HMRC treats granting facilities to moor or berth a boat as a standard rated supply, even though letting land is often exempt. The main exception is a boat that meets the VAT definition of a houseboat, whose mooring is exempt, and mooring for some qualifying ships can be zero rated. A marina that takes annual berth fees in one payment collects a large amount of VAT at renewal time and pays it over on the next return, so the return dates belong in any forecast shown to a lender.

• Monthly cash flow. Two or three years showing the winter low point.
• Renewal record. Berth holders renewing each year and the waiting list.
• Other income. Storage, lift outs, repairs, fuel and chandlery.
• VAT calendar. Return dates and the VAT due after renewals.

HMRC sets out the VAT treatment of mooring and berthing. Seasonal gaps often sit on a revolving credit facility, boat and chandlery stock can use stock finance, and a large quarter can be spread with a VAT loan. Instant Quotes lets a marina see which panel lenders could offer a seasonal facility.

Most marinas earn the bulk of their income from berthing. Annual berth holders usually pay in advance, which gives the business a strong cash position at the start of the year and a predictable base that lenders value. Visitor berths, winter storage ashore, lift-outs and launches, and dry stack storage add more. Many sites also earn from boat repairs and servicing, a chandlery, fuel sales, brokerage, and rent from tenants such as a café, bar, sailmaker or engineer.

The costs are heavy and lumpy. Pontoons, piles, gangways and walkways wear in salt or fresh water and need replacing on a cycle. Silt builds up and dredging can be a major expense. A travel hoist, boat mover or forklift is essential kit, and a breakdown in the autumn lift-out season is costly. Seabed, riverbed or canal leases, insurance, business rates and staff run all year. Good marina finance matches each of those costs to the right kind of borrowing.

• Replacing or extending pontoons, fingers, gangways and piles
• Buying a new or used travel hoist, boat mover, trailer or forklift
• Building or extending dry stack racking, repair sheds and hard standing
• Dredging to keep berths and channels usable
• Shore power, water, lighting, security and access systems, or fuel berth upgrades
• Refurbishing toilets, showers, the marina office or a waterside restaurant
• Buying a marina or boatyard, or the freehold of one already run
• Refinancing existing borrowing, or covering cash flow before berth renewals

Many marinas do not own all of the land and water they use. Berths often sit over seabed or foreshore leased from The Crown Estate (Crown Estate Scotland in Scotland), a harbour authority or a private owner, and inland sites may depend on agreements with the navigation authority. Lenders check that these leases and licences run well beyond the finance term and can be assigned or charged.

New pontoons, piling and dredging may need consents as well as planning permission. In England the Marine Management Organisation issues marine licences; see GOV.UK guidance on marine licence applications. Wales, Scotland and Northern Ireland have their own licensing bodies. Lenders will usually want consents in place before they release funds for works.

A loan for pontoons should be repaid well before they need replacing again. Dredging costs can recur, so build them into forecasts rather than borrowing for them each time. A marina valued with its berth income can lose value quickly if occupancy falls, so test repayments against a cautious renewal rate. Directors should expect personal guarantees; see our guide to personal guarantees. Borrowing of £25,000 or less by sole traders and small partnerships can be regulated consumer credit, which brings additional protections.

This page covers finance for businesses that run marinas, boatyards and moorings. Finance for a private boat or a berth for personal use is a different kind of borrowing and outside its scope. Marinas with holiday lodges may also find caravan park and campsite finance useful.