Superyachts are a big business. How the money works.

There are now 6,022 superyachts in operation worldwide, according to a 2025 report from the SuperYacht Times. That includes the likes of Amazon founder Jeff Bezos’ Koru, a 417-foot-long vessel costing a reported $500 million, and Bill Gates’ Breakthrough, a 390-foot boat that the SuperYacht Times said is the first to be equipped with hydrogen fuel cells. Gates is reportedly selling it for $645 million.

Barron’s recently sat down with Verbit, 63, to learn about the yacht world. Here are highlights of the interview, which have been edited and condensed for clarity.

Barron’s: Before you took the job, did you know anything about yachts?

Verbit: I grew up on sailboats. I used to race with my father and many of our childhood vacations would be sailing with our squadron. We would go island hopping, mostly in Florida. I have three sisters—they didn’t love racing—so it was me and my dad and his buddies.

A mentor of mine at the bank knew that I had been involved in boating as a kid and loved racing. I had been transferred from Tampa, where I started when I was in college, to the East Coast as a branch manager. And he called me up one day and said, ‘How do you like what you’re doing?’ I said, ‘I’ve learned a lot, but I don’t really love it.’ He said, ‘Well, there’s an opening in the private bank for a new marine lender. I’ll get you the interview. It’s up to you to get the job.’ That’s how I ended up in the marine division.

Lisa Verbit, national yacht lending executive at Bank of America Private Bank

What was the business like in 1989?

We were doing probably $150-$250,000 [as] our average loan size. I remember doing loans as small as $50,000. $1 million was a very large loan. I remember having a $3 million loan that I was working on. I was working with NCNB National Bank at the time (which became NationsBank and eventually, Bank of America). Ken Lewis (who later became CEO of BofA) was the president of our Florida bank. So we had to go to Ken Lewis to get our $3 million yacht loan approved.

In the late ’90s, the luxury tax was put into place, which put a 10% extra tax on luxury items. That kind of quashed the industry a bit. And then [the tax] got repealed under the Bush administration, and then the business started taking off again. I don’t think it’s 100% because of the luxury tax. As we created more and more wealth in the country and there was more and more economic growth, the yachts got bigger and bigger and bigger. Now we’re doing construction lending in foreign countries, primarily Germany, Italy and the Netherlands for American beneficial owners.

What’s your largest deal to date?

We’ve had two north of $250 million. As the industry evolved, our comfort level with lending on bigger and bigger yachts and our comfort level in doing construction lending [rose]. My first construction loan was $1 million dollars for a client who was building a custom sport fishing yacht at a company called Garlington (Landeweer), based in Florida.

The smallest [construction loan] I did was for $500,000 for a client building at a small shipyard in South Carolina. Now our minimum for construction is $15 million. We had to draw a line somewhere. We don’t even get many requests for construction financing below $15 million. Most are north of $25 or $30 million.

Are most custom shipbuilders based outside of the U.S.?

The yacht-building business has a longer tenure in Europe. There are shipyards in Europe that have been around for over 100 years. There are a lot more custom builders in Europe than there are in the states at the size range that we’re involved in.

We’ve only had maybe two or three shipyards where there have been issues that arose during construction. We got out of all of them whole. We think about construction risk. But at the end of the day, it’s about client selection.

What kind of construction risk exists? Natural disasters?

You have builder’s risk insurance to cover that risk during construction. Your real construction risk is builder risk—is the builder going to complete the project. And you have credit risk, like you would [with] any other deal. But if you lend money to someone on a completed yacht, and the deal goes south, you can work it out with the client, which is the norm. We don’t get to foreclosure—it’s rare, exceedingly rare. But with construction, you could have a partially completed yacht—those are the risks.

That’s why client selection is important, and knowing who the builder is, is important as well. The few times when a yard has gone bankrupt, or into receivership during construction, we’ve been able to work with the receiver to get the yacht completed, or the client moved the yacht to a different yard. It’s not a pleasant process to go through but we haven’t gone through it often.

What’s a typical length of the yachts that you’re dealing with?

The yachts that we’ve provided construction financing for are typically 120 feet (about 37 meters) and north of that. Construction deals don’t come every year. We can go a couple of years with no construction loan. In 2023, we closed three, and two were big ones in that year. Last year we had one and this year we’ve got one. It’s a multi year build cycle—then you start getting portfolio growth, because you’ve got a bunch of large construction loans and they’re all funding up at the same time. And you’re booking some new business for completed yachts.

What’s the longest yacht you’ve financed?

A couple of the yachts we’ve done are over 300 feet. That’s bigger than a football field! We’ve been to multiple shipyards over the years. I think it was 2009, we went to a shipyard in Germany—Lürssen. We had a build project going on there at the time and the yacht was out of the water. Talk about feeling really, really tiny.

It’s incredible the work that goes into these yachts. They’re truly works of art.

What kind of yachts do most of your clients buy?

The bulk of our business is production yachts because you can have 98-foot yachts, or even 120- or 150-foot yachts that are production or semi-custom. And the bulk of the deals that we close are for brokerage yachts—preowned yachts. Clients are buying them on the secondary market. Where we get into new yachts is largely with custom construction loans.

How does a construction loan work?

If a yacht is being built in the Netherlands, the contract is governed by English law. And when we do a construction loan, the builder is in the mix. There’s what we call a tripartite agreement, which may have a different name depending upon which jurisdiction. But it’s basically an agreement whereby the bank, the builder, and the client agree to what any unwinding is going to look like if the deal goes south. So you’ve got Dutch counsel, English counsel, bank counsel and you’ve got the shipyard counsel. People ask all the time, ‘why does it take so long?’ I don’t know. It just does.

Our money is not going in until their equity goes in. For advancing 70%—which is our typical advance rate—their 30% goes in first.

What is the outlook of yacht buyers today?

It depends on your viewpoint of what’s happening with uncertainty around the world—geopolitical uncertainty, risks, and also tariffs. A lot of our clients are building yachts offshore. If you import it, then you’re going to have to pay [a] tariff. It’s causing people to rethink how they take ownership of their yachts.

Of the yachts we finance, nearly all of them are what we call flagged, which [means] it is registered with a country. Nearly all of [the larger yachts] go into offshore flagging jurisdictions—the Cayman Islands, Marshall Islands, Jamaica, Malta, Isle of Man. [A client] who I’m working with now would have probably flagged his yacht in the U.S., but he’s now going offshore because if he imports it…there are tariff risks.

Tariffs aside, why do yacht owners “flag” their boats offshore?

There’s myriad reasons why people flag offshore. Perceived extra confidentiality. [Or], because you like the fact that you can put Bikini [Atoll] as your port, which is one of the Marshall Islands ports.

If you’re going to charter the yacht, if you flag your yacht (in the U.S.), there are limitations under which you can have foreign crew. If you flag your yacht in the Cayman Islands or the Marshall Islands or any of these other jurisdictions, they don’t care about the nationality of your crew. If you limit yourself to the U.S. you’ve limited your access to employees to service your yacht.

How does this year look for Bank of America Private Bank?

We’ve had a number of deals that we closed for clients who built yachts and even some sizable ones north of $10 million, $15 million who built yachts and didn’t do a construction loan either because it was too small or because they didn’t want to take a construction loan.

Then after the fact, once they took delivery, they wanted to put a permanent loan on it. I’ve done three or four deals this year that were just that. In our world, because we have an appetite for even the very large deals—one large deal, two large deals can make your year. We’re going to have a solid year. We’re going to see growth again in our portfolio. I don’t know if it will be the best year ever, but you don’t have those years every year anyway.