Manoj Sureka, CEO & Managing Partner, Synergy Fin. Consulting is a recognised leader in the finance and investment sector. Manoj has built a strong reputation for his strategic foresight and ability to foster sustainable business growth.
At Synergy Fin. Consulting, the firm provides end-to-end fundraising advisory services through private equity, debt, and trade finance solutions. Their clientele includes SMEs and corporates seeking capital through banks, financial institutions, sovereign wealth funds, and other institutional investors. Synergy also offers specialised advisory services in mergers and acquisitions and joint ventures.
Q. What exactly is Vessel Financing?
Vessel Financing is a structured funding mechanism that enables ship owners and maritime investors to purchase or refinance vessels using the vessel itself as collateral. Instead of deploying full capital upfront, borrowers leverage asset-backed credit to acquire or enhance fleet capability while preserving liquidity for operations and expansion.
Q. Why is this form of financing gaining traction in the marine industry?
Global trade continues to rely heavily on seaborne logistics, and fleet capacity is directly linked to earning potential. Vessel financing empowers owners to scale quicker, enter new cargo segments, or free up capital from existing tonnage. It converts a high-value asset into a growth engine — a key driver in today’s capital-efficient markets.
Q. What types of vessels are commonly financed?
Most commercial categories are finance-eligible, including dry bulk carriers, container vessels, oil and chemical tankers, LPG carriers, multipurpose/general cargo ships, OSVs, barges, and even high-value yachts. New acquisitions and refinancing of operational vessels are both widely considered.
Q. What is the typical size of funding available?
Financing usually ranges from USD 2 Million to USD 50 Million per vessel, depending on valuation, charter profile, and technical condition.
Q. How much leverage can an owner expect?
Loan-to-Value typically ranges between 60%-80%, subject to vessel age, earning history, and risk rating.
Q. What does a standard financing tenor look like?
Most structures offer up to five years, with balloon repayment options to keep monthly cash flows lighter. Repayment is generally aligned with the vessel’s earning capability or charter terms.
Q. What determines the interest rate?
Rates are benchmark-linked, commonly SOFR or Euribor + margin, refined after thorough credit, technical, and commercial assessment. Stronger assets and sponsors enjoy more competitive pricing.
Q. What security package do lenders typically require?
A vessel financing facility generally includes:
• First-ranking mortgage on the vessel
• Assignment of earnings, insurance, and charter contracts
• Corporate and/or personal guarantees
• Share pledge of the owning SPV (if applicable)
• Technical and commercial management undertakings
This structure secures lender confidence while ensuring operational freedom for owners.
Q. Are only new vessels financed?
Not necessarily. Pre-owned vessels are actively financed provided they maintain class, remain commercially efficient, and generate revenue. Refinancing of owned hulls is equally common and is a strategic method for releasing capital for expansion.
Q. What documentation initiates the process?
A typical submission includes the vessel’s particulars, class & insurance certificates, sponsor financials, valuation reports, bank statements, and charter contracts where applicable. Well-prepared documentation shortens approval timeframes significantly.
Q. What is the expected turnaround for funding?
Subject to complete documentation and compliance readiness, lenders may issue term sheets promptly, with end-to-end execution and drawdown often concluding within 4–6 weeks.
Q. What makes Vessel Financing an attractive growth tool?
• Enables expansion without full upfront capital
• Releases equity from existing vessels
• Supports entry into new trade segments
• Structured repayments against vessel earnings
• Builds long-term asset and fleet value
In simple words — if the vessel sails and earns, it can be financed.
