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Finance Boat Owned by LLC Questionst

Old 11-27-2018, 07:08 PM
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Default Finance Boat Owned by LLC Questionst

I am purchasing a new $70,000 boat and have excellent credit.

I want to own the boat owned by an LLC and am happy to personally guarantee the loan as well.

Anyone know of a lender that will do this? I would prefer a low or no doc loan as I own several businesses and it's a headache providing all the tax returns and profit and loss statements... (I know that sounds lazy but just what I prefer)

Thanks in advance for your thoughts and/or suggestions.
Old 11-27-2018, 07:19 PM
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Originally Posted by Houseofpayne View Post
...I want to own the boat owned by an LLC...
Do not understand. Do you mean you have an LLC and you want to finance a boat, and make the boat an asset of your LLC?
Old 11-27-2018, 07:27 PM
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Correct, I created a new LLC to own the boat as an asset. I want the loan to be to the LLC with my personal guarantee.
Old 11-27-2018, 07:33 PM
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That's what I thought you meant. I don't really know the official answer. I think a financial adviser could tell you. My *guess* would be that you would finance the asset yourself, and title it in the name of the LLC. If you did that, I don't think you would need any kind of special lender. Also when I hear of a "special lender" I think high interest loan.

I doubt for a regular loan like that you would have to provide tons of documents. They'd probably run your credit and ask you some basic questions.
Old 11-27-2018, 07:35 PM
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It should not be tough. I used an LLC to purchase commercial property. I still had to provide my personal as well as my businesses financials. But the bank suggested it and my attorneys almost required it. A boat should not be any different and will alleviate some of your personal risk (not all but some).
Old 11-27-2018, 07:40 PM
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I own a business and also owned a boat 10 years ago through an LLC (tax reasons) without issue....but I paid cash for the boat. I recently bought another boat and wanted to do the same however I was getting a loan. Ended up being too much trouble and just bought the boat on a personal/boat loan without doing the LLC.

EDIT: Clarifying WHY I did a personal loan. Some loan companies would allow me to setup in an LLC (with a personal guarantee) but the interest rate was going to be about 1.5% higher. Setting up the LLC in another state had the potential to avoid high personal property taxes....however in my case I was going to have them anyway.

Last edited by t500hps; 11-28-2018 at 08:14 AM.
Old 11-28-2018, 03:02 AM
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Originally Posted by Houseofpayne View Post
it's a headache providing all the tax returns and profit and loss statements... (I know that sounds lazy but just what I prefer)

.

what is the headache about the tax returns "if" you are current with filing them with the IRS go the the file cabnet pull them out make a copy and do a personal finance statement that should only take a hour at most. no if your not running your several business on the books then that may explane your lazyness
Old 11-28-2018, 06:10 AM
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This is what I did. My LLC owns the boat. I own my trailer so I could easily get a tag. I used a local bank I’ve been dealing with for years so I don’t have a recommendation for you other than to shop around. If you deal with a big national bank prolly not gonna happen. Credit union or local would be fine.
Old 11-28-2018, 06:11 AM
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Forming LLC ‘s for larger boats in tax friendly states has become much more common place....check out Montana

the LLC’s being new don’t have established credit and being pass through entities require personal credit qualification anyway.....you’ll have to qualify personally.....

this is is done all the time nowadays.....no issue w/ insurance either

Old 11-28-2018, 06:18 AM
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What do you hope to gain by this?
Old 11-28-2018, 06:22 AM
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Originally Posted by t84a View Post
What do you hope to gain by this?
An audit...
Old 11-28-2018, 06:37 AM
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Originally Posted by Houseofpayne View Post
I am purchasing a new $70,000 boat and have excellent credit.

I want to own the boat owned by an LLC and am happy to personally guarantee the loan as well.

Anyone know of a lender that will do this? I would prefer a low or no doc loan as I own several businesses and it's a headache providing all the tax returns and profit and loss statements... (I know that sounds lazy but just what I prefer)

Thanks in advance for your thoughts and/or suggestions.
It's 70k- why not just self finance? Really, if you own several business, and don't have the 70k for a depreciating, discretionary toy, maybe you can't afford it and should focus on generating income? Particularly since you don't have the paperwork in hand, which is telling something else. I mean, you should be able to generate this paperwork very quickly.

Sometimes the little hurdles that you come to are telling you something. For me as a freelancer, I would never dream of financing something like this because it limits my opportunities moving forward. Of course, what do I know.
Old 11-28-2018, 08:02 AM
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Originally Posted by Houseofpayne View Post
I am purchasing a new $70,000 boat and have excellent credit.

I want to own the boat owned by an LLC and am happy to personally guarantee the loan as well.

Anyone know of a lender that will do this? I would prefer a low or no doc loan as I own several businesses and it's a headache providing all the tax returns and profit and loss statements... (I know that sounds lazy but just what I prefer)

Thanks in advance for your thoughts and/or suggestions.
good luck finding someone that won't need docs to prove your income...

an option might be a boat loan that does not require the boat as collateral which might result in a little bit less paper work

as for having it owned by a llc, probably not an issue with most marine lenders but most probably don't finance 70k and expect to setup in a llc (they usually deal with six figure notes). you can try yachtcloser.
Old 11-28-2018, 08:06 AM
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I agree with a lot of what is said here except the part where everyone is preaching that the tax returns should be readily available. That is not the case with my business either. I am seasonal as well as work on very costly long drawn out remodels. I file late, very late every year just because of how we are structured and the fact that we built a new facility and profit margin is low enough to really not have high penalties or interest at this time. We are climbing up out of the hole but these interest hikes have really been taking their toll this year. The tariffs are very minimal but the rise in interest is slowing us down. When I bought my boat, my accountant was dead set against putting it in the business in any way and I'm a boat and RV dealer! On our high end buses, we are getting many customers `who are getting busted for their Montana LLC's and receiving tax bills from their home state. Montana is freely handing out the LLC info to the states requesting it. New Jersey started it several years ago. Michigan, New York and several other high tax states are really going after the Montana LLC's.
Old 11-28-2018, 08:28 AM
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Originally Posted by Vantaredoc View Post
I agree with a lot of what is said here except the part where everyone is preaching that the tax returns should be readily available. That is not the case with my business either. I am seasonal as well as work on very costly long drawn out remodels. I file late, very late every year just because of how we are structured and the fact that we built a new facility and profit margin is low enough to really not have high penalties or interest at this time. We are climbing up out of the hole but these interest hikes have really been taking their toll this year. The tariffs are very minimal but the rise in interest is slowing us down. When I bought my boat, my accountant was dead set against putting it in the business in any way and I'm a boat and RV dealer! On our high end buses, we are getting many customers `who are getting busted for their Montana LLC's and receiving tax bills from their home state. Montana is freely handing out the LLC info to the states requesting it. New Jersey started it several years ago. Michigan, New York and several other high tax states are really going after the Montana LLC's.
Most lenders will request the last two filed returns

If you file late that is your decision and you may have good reasons but know the ramifications it may pose should you need to secure a line of credit and haven't filed yet. You also may be able to better time...so if you filed late, make your boat purchase before the next year's tax returns are due before April?

LLCs have very little to do with sales/use/property tax...
Old 11-28-2018, 08:49 AM
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Originally Posted by mystery View Post
Most lenders will request the last two filed returns

If you file late that is your decision and you may have good reasons but know the ramifications it may pose should you need to secure a line of credit and haven't filed yet. You also may be able to better time...so if you filed late, make your boat purchase before the next year's tax returns are due before April?

LLCs have very little to do with sales/use/property tax...
No desire for more credit! With just a balance sheet and you are strong enough there are good lenders we have that will go off stated income. An LLC in Montana can have everything to do with “sales/use/property tax”..been happening for many years on luxury items...
Old 11-28-2018, 09:13 AM
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Am doing this right now. There is a site to easily create an LLC if needed. My loan and insurance will have the LLC named first, me second, on all documents. I am primarily doing it for insurance reasons. You do need to send all the paperwork from the newly created LLC, plus all the normal PIA documents for any loan.
Old 11-28-2018, 09:49 PM
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Appreciate all the feedback, I will proceed with providing my financials and personally guarantee the loan for my LLC or just loan the money to the LLC.

The new tax law provides 100% bonus depreciation if you buy a boat for business purposes.. to save 35% of the boat price seems smart to me.. I realize it has to be used primarily for business which it will be.
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Old 11-28-2018, 11:12 PM
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Can one of your other businesses loan the LLC the money for the boat? seems like the easiest way.
Old 11-29-2018, 06:29 AM
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Originally Posted by Houseofpayne View Post
Appreciate all the feedback, I will proceed with providing my financials and personally guarantee the loan for my LLC or just loan the money to the LLC.

The new tax law provides 100% bonus depreciation if you buy a boat for business purposes.. to save 35% of the boat price seems smart to me.. I realize it has to be used primarily for business which it will be.
ok so this isn't a personal boat you want to put into a llc to shield liability?

this is a boat that will be used in commerce?

that changes things quite a bit! you will need to find a lender that is OK with the boat being used in commerce. you will need insurance that will cover it. depending on the use in commerce, you may need a whole lot more, especially if its not US-built, including MARAD waiver, endorsements, etc.

what boat?

how will it be used in commerce?

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