Shipping is a highly volatile and capital-intensive industry. In a market where valuations often fluctuate from one day to another, buyers of liquid shipping assets often need to lift their financing subjects towards the seller just a few days after they have entered into a vessel purchase agreement. For such transactions, it is crucial to obtain financing commitments quickly. An established client relationship with a bank that can provide firm loan commitments in a very short time, will ensure that you don’t miss out on attractive investment opportunities.
At Pareto Bank we are able to swiftly indicate on loan financing inquires and obtain credit approval within two weeks from the indicative terms have been agreed upon.
The key behind Pareto Bank’s swift response is as follows:
1. The team members are involved in the entire loan process
Pareto Bank has short decision lines. As opposed to traditional larger shipping banks, where efficiency depends on the cooperation of large specialist departments, we are a small shipping team where everyone is hands-on and involved in the entire process. In Pareto Bank, we do all the work ourselves – from A to Z.
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Every member on the team
- is in direct communication with our customers throughout the entire process
- understands our customers’ business, risks and capital needs
- has a good understanding of the typical terms and conditions we can offer
and can indicate and negotiate the terms and conditions toward our customers
- has in-depth knowledge of the specific shipping segment and makes own risk assessments in addition to vessel valuations
- prepare credit memos and present these to the banks' credit committee and board of directors
In Pareto Bank, we seldom have to wait for answers from colleagues or decisions to be taken at a higher level in the organization. As a client in Pareto Bank, you will always communicate with the same advisers.
2. Assessment of risk factors
To offer competitive financing terms in line with the current market, the bank has to assess risk factors along multiple axes in order to get the necessary comfort before approving a loan.
The most important areas we typically assess are
- the customer’s experience, competence and track record from investing in and managing the respective type of vessels
- assessment of purchase price and entry point in a historical perspective
- the current market conditions and outlook
- financial robustness of the business case, including cash break-even levels vs. earnings potential and required liquidity buffer
- the quality of the vessel, the track record of the shipyard that built it, the vessel’s age, drydocking schedule, and technical condition of the vessel
- the liquidity of the vessel in a sale/purchase transaction
- the financing structure, loan to value, tenor and profile
An already established relationship between the customer and the bank and timely delivery of information needed to perform risk assessments are also critical elements of obtaining credit approval within two weeks.
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Om Pareto Bank
Pareto Bank ble børsnotert i 2016, og Pareto AS er bankens største eier. Banken har en forvaltningskapital på rundt 25 milliarder. 2023 var bankens beste år noensinne med et resultat etter skatt på kr 605,0 mill. Pareto Bank har en god kapitalbase og solid plattform for videre lønnsom vekst.
Vi er spesialisert på eiendomsfinansiering, bedriftsfinansiering og skipsfinansiering. Banken har en særlig sterk posisjon innen finansiering av boligutviklingsprosjekter. I tillegg tilbyr vi en rekke forskjellige finansieringsløsninger til mellomstore bedrifter. Innen shipping retter vi oss mot norske rederier, eiere og det norske prosjektmarkedet. Vi bygger alltid vårt arbeid på faglig kompetanse og bruker vår kunnskap til å skreddersy løsninger. Vi er ubyråkratiske og får ting til å skje. Raskt, ryddig og tett på.