Good Banks Recognize Good Ideas
With more miles of freshwater shoreline than Florida has coastline, just about everyone in Kentucky knows someone who owns a boat. But you know what they say about boat ownership… the two best days of owning a boat are the day you buy it and day you sell it. Thankfully we don’t believe what “they” say.
Despite the nearest piece of sea being a good ten-hour drive, it’s not unusual for Kentucky bank customer to want to talk about funding boat purchases. For the most part they are leisure vessels, racing up and down the Ohio River or chugging about at a more sedate pace in one of our many lakes and reservoirs.
What is unusual is to be approached to talk about buying a 46’ catamaran as a business, a sea-going vessel at that. And not one in the Gulf, a catamaran located in St Thomas, US Virgin Islands, primarily operating in the British Virgin Islands, no less. One called “Flip Flop.”
For most banks, that’s the kind of investment that is far out of their comfort zone. Too far out. But it’s what our customer Jim Lacy had in mind so we listened and approached the proposition with an equally open mind.
Mr. Lacy, a Louisville tech executive, had an established relationship with us before he mentioned anything about a catamaran. It wasn’t the first business venture he had spoken to us about the possibility of funding, but it was by some distance the most unusual. Not just buying a catamaran – but running it as an all-inclusive charter vacation business.
…listening is how opportunities are found.
To begin with, the economics of owning a boat are very different from those involved with owning a car. For starters, insurance costs are significantly higher. You can’t put a boat in the garage whenever the weather gets a bit dicey, as it often does in the Caribbean – so boat owners can pay up to 2.5 per cent of the value of the boat per year in insurance. And most boats cost an awful lot of money to operate.
There are many other considerations to take into account when planning a boat purchase, such as maintenance and mooring. It’s also important to bear in mind that when boats have accidents, they generally end up at the bottom of the ocean not a body shop. So the annual costs of owning and running even a relatively small boat can be high – as a minimum probably 5 per cent of the value of the boat. For a catamaran in the Virgin Islands, the bill was going to be considerably higher.
But wasn’t the costs that concerned us. It was the opportunity that intrigued us. . . Read full story