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    3 Replies Latest reply on Jul 30, 2010 3:06 PM by FinanceOne

    Trying to start a towboat business

    Captrob Newbie
      Hello, I'm currently trying to start my own towboat business. I have been in this industry for 17+ years and have seen companies make and extreme amount of money. With the economy the way it is a lot of smaller companies have folded or sold out to the bigger companies. Many have folded cause of the new regulations the coast gaurd is enforceing these days. This is an industry that has been in the shadows for years. Smaller companies that have accidents similiar to the gulf oil spill and the barge accident with the tanker in New Orleans were not prepared for it cause of lack of maintenance and years and years of no enforcement from anyone. I started out here when a lot of the changes started taking place. I have been in every aspect of the business from deckhand, to repair, to sales, to running pilot and captain. I know enough quailty people to have myself covered in repairs, engineering, piloting and safety that i'm not worried about my day to day operations. I need help with my starting capital. I can't get a boat without money from the bank. I can't get a contract without a boat. Bank will fund for a boat if i got a contract. Also towing companies are slow to pay, they usually do a 60 to 90 day payment. Any help will be grateful!!
        • Re: Trying to start a towboat business
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          • Re: Trying to start a towboat business
            FinanceOne Wayfarer
            That is a barrier of entry but you can get creative. What about having a towboat ready to lease and seek contract(s)? The 60-90 delay in payment is easy to overcome. As long as the client is creditworthy, you can factor the receivable and get 70-80% funded from a factoring company as soon as delivery is complete and the remaining amount (less the factoring discount) once the client pays the bill. You may have to continue this path until you line up enough work for a bank to finance the purchase of the towboat.

            You may also look through classifieds and see if an owner will do carry back financing on the purchase of the tug. Maybe the bank will fund a portion of the purchase because the aren't taking on the entire risk.