How to buy that boat you’ve had your eye on, with Joe Dalton

So you want to own a boat but you don't know how to finance it? Then we've got you covered. I'm in Venice with the family this week, a city more closely linked to boats than almost any other. That's a coincidence. We're not talking about gondolas or cruise ships, today, but we are talking about pretty much every vessel in between.

You can read more about Salt and its launch at https://www.salt-finance.com/

Joe is on LinkedIn, as is Salt itself (they're also on Instagram, where their pictures are getting me a bit too interested in buying a boat myself).

Or if you're really quick, you can find them all in person at Boat Life 2023 in Birmingham where they're sponsoring the Live Stage

You can learn more about myself, Brendan le Grange, on my LinkedIn page (feel free to connect), my action-adventure novels are on Amazon, some versions even for free, and my work with ConfirmU and our gamified psychometric scores is at https://confirmu.com/ and on episode 24 of this very show https://www.howtolendmoneytostrangers.show/episodes/episode-24

If you have any feedback, questions, or if you would like to participate in the show, please feel free to reach out to me via the contact page on this site.

Regards,

Brendan

The full written transcript, with timestamps, is below:

Joe Dalton 0:01

Salt's purpose, really, is to help more people enjoy the oceans, the rivers, and waterways. We can simplify the funding process for buying a boat, which can be quite complex and daunting and a lot of things to think about.

Brendan Le Grange 0:17

If schedules had aligned better, I might have spent a couple of weeks this last summer with guest number two of the show Graham Whitley, sailing in Croatia. And maybe that would have turned me to the sport. Certainly, the pictures have me at least tempted.

And I've somehow managed to get several sailors onto the show.

That said, as little as I know about boating, I know it's not the cheapest pastimes, though maybe not as expensive as I would have first thought: a little bit of browsing of boats for sale in my neighbourhood shows me that I could pick up a romantic little wooden sailing yacht for about £65,000, or the price of a luxury SUV.

Now, I don't have a luxury SUV either. But if I was going to buy one of those, I would at least know how to go about financing it. I have no idea how to finance the boat.

Welcome to How to Lend Money to Strangers with Brendan le Grange.

Joe Dalton, CEO and founder of Salt, welcome to How to Lend Money to Strangers.

Joe I grew up in Cape Town, which is a coastal city with a whole history linked to the sea and to sailing; then I moved to Copenhagen, which is very similar, on the sea link to the sea; then Hong Kong, on the sea linked to the sea; and now to Brighton where we had a view of the sea. And yet, I myself, have never been a boater. I think I've been on a sailboat once in my life, and other than ferries for commutes very rarely on other occasions. So it's not a subject I know a lot about.

But I've gotta say, preparing for this I went onto some boat for sale pages and got myself quite interested in a few boats I really shouldn't be looking at! So I'm really looking forward to hearing more about what you're doing, but before we get into that let's talk about your life pre Salt, before this decision to go and start your own fintech.

Joe Dalton 2:13

Yeah, certainly I started my finance career with NatWest.

When I was 19 years old, I had gone to Manchester University and started a part time job, really learning the ropes from filling the ATMs and counting cash and checking checks - which I don't think we do anymore, it's amazing how much it's changed over the 15/ 16 years or so.

I did that and had a very, very good career with NatWest. I went from strength to strength, really, a lot of that in leadership roles, running teams on the front line: so sales, business development, customer service, etc, starting out in the branches, as I say, and then I did some time in specialist financial advice, pensions, investments, and moved into a short period in mortgages.

And then came across into commercial banking, in the asset finance space, funding everything from plant and machinery for pasta making companies through to trucks, vans, construction equipment - you name it. It was very broad and interesting. And that was for Lombard/ NatWest's asset finance.

And then the opportunity came up to work in the leisure marine portfolio for Lombard. So again, taking that asset finance experience and putting it to play in a more specialist area with the leisure marine. And having enjoyed sailing over the years, it was an opportunity to combine the experience that I'd gained over years and years in finance with something that I was passionate about - the sailing - and a nice marriage of the two things.

Brendan Le Grange 3:40

When you are talking about something like boat finance, or pasta machine financing - is this just auto financing with a different asset? Or is there a unique sort of set of challenges that comes along when you you're doing these more exotic assets?

Joe Dalton 3:55

I mean, a lot of it's the same from a credit perspective. You're very much looking at the borrower and their underlying financial situation. So you know, as a lot of customers are in the boating space are directors or have their own businesses, there's a lot of reviewing, you know, financial information, profit and loss accounts and balance sheets and the business's performance, looking at the management team as well and their experience and how the business has performed - just as you would do if you were lending on a truck or a piece of machinery.

The difference then comes more around the use of the asset and obviously the asset itself - where lending to businesses for assets that are income generative or crucial to the operation of the business, a leisure yacht doesn't tend to tick that box.

And so there's a there's a nuance in the in the way that the asset is used in the way it's going to benefit the business. And then also there's the asset itself. So understanding the inherent value of the asset, its depreciation, the impact that that has as well.

Brendan Le Grange 4:50

Obviously, as you said, you had this background enjoying sailing as well as a working background in lending for leisure marine craft, but what was that spark that made you decide 'I'm gonna go out on my own, I'm going to launch my own startup'?

Joe Dalton 5:03

Yeah, I think numerous different things. I'd been following the innovations that we've seen in the FinTech space over the past decade and beyond with personal interest, attended many FinTech festivals while I was still working with NatWest, and just love to the transformation in the industry and the use of technology coming in to improve things for customers.

The crunch point really was was taking a small sabbatical from NatWest and using that time to go on a bit of a sailing trip across the Atlantic with a couple of friends on a very small sailing boat.

And it gave me a lot of time to think about, you know, what I wanted to do with my life.

And having always had this passion to create something myself and build my own business it dawned on me that if I didn't get on with it, then time was gonna run away from me and I'd be sat there a great grey haired old man doing the same job, which as you quite rightly pointed out, I loved, you know, it was a great job with NatWest, NatWest is a great employer and I have lots of good experience with them, I wouldn't have stayed with them for so long if that hadn't been the case, but this time floating across the Atlantic, considering things probably just gave me the kick up the kick up the bum really to, you know, to go off and do this. And the realisation that I'm not getting any younger, you know, the time was right to take that leap of faith, ultimately.

Brendan Le Grange 6:18

Let's talk about that, because I suppose in some way, there's a similar reputation between buying a boat and going into entrepreneurship: that there's the lovely dream... and then there's the actual reality of how hard reality.

And obviously, it's hard enough to start any business. But in the lending world, there's a lot of regulation, there's a lot of boxes to tick, and things that need to be done. So what was it actually like getting a lending business, a specialist lending business off the ground?

Joe Dalton 6:45

Yes. Well, you know, let's not jump the gun, we're still working on that, to a certain extent, Brendan.

But we've made some great progress. For me, it's been it's been such a fantastic learning curve, and an adventure really from start to finish.

I mean, from the beginnings of going out and sourcing funding. First of all, that was our first step, you know, we needed to bring in some investments in order to build the tech platform, build the app and build the proposition. Also put together all the regulatory and risk frameworks etc. And despite my 16 years experience and exposure to working in a regulated environment, I never worked in the risk and compliance teams and departments. So certainly not my strongest skill set. So obviously had to had to find someone and bring them into into the team and our our Chief Risk Officer Brett Downes, has been a fantastic addition to that. But yes, everything has been a bit of a roller coaster of ups and downs.

The initial fundraise actually went fairly smoothly. Certainly when I speak to people and tell them we kind of wrapped it up in three months, they find that quite shocking. And obviously, it was all new to me at the time, and sort of pitching Dragon's Den style to, to people was all very new.

And then the building of the tech stack itself. We've built the app, the platform, the booking and servicing system, all from scratch, it's all proprietary.

We looked at various different products on the market. And although there were some fantastic things out there that did 1,000,001 different things. We didn't really need them to do all of those. We just wanted them to do the one that bespoke thing. And so we built from scratch. And I'm really pleased that we we went down that route in the end.

And then the compliance, as you say, is extremely challenging. The FCA have suffered with some staffing issues and delays and it's taken a lot longer than we'd ever hoped for for that to come to fruition. But I'm pleased to say we're nearing the end of the journey, and will very shortly be given the thumbs up from the FCA we can we can then finally start lending money to strangers, yeah

Yeah, and it's not funding multimillion pound deals. So these are boats that many consumers could be affording. And I imagine many would like to, but it's a complicated process. Maybe people don't know how to do it.

Brendan Le Grange 9:02

So let's talk in practical terms: if I'm wanting to buy this new yacht of mine, and I go to Salt (boat finance made simple) to look for financing, what's the process? What does that look like to me as a borrower?

Joe Dalton 9:16

Yes, well, you're quite right. You've hit the nail on the head there, Brendan, with regards to the target market and customers that we're looking to help with it. You know, we aren't looking at your super yachts, multimillion pound vessels, we're looking at what I consider the sort of smaller end of the market. And in fact, in the UK during 2020 the stats were that there were around 4000 boat purchase transactions, and the average value of those transactions was £75,000.

So there are a lot of transactions customers buying boats that we can help within our remit.

And Salt's purpose, really, is to help more people enjoy the oceans and enjoy the experiences and the passion that I have for sailing - by making finance simpler, easier and more accessible.

So you touched on what the process is, once you found that dream boat, or even beforehand, if you're just looking at budgets and you want to understand how much you might be able to afford, the first thing you will do is visit the Salt website where you'll be able to get a quotation using the calculator on the website. You'll be able to play around with that and work out exactly what your budget is.

At the point that you will then want to apply, we have decided on an app as the best route for customers to apply - because it's not really a one and done sort of process when you're buying a boat, as it is with maybe taking out an unsecured loan for £20,000, where you complete the application, you wait for a response, you sign the paperwork, you get the money transferred to your account, hopefully.

Boat finances is probably a bit more akin to buying a house or property. And in fact, boat loans are often called marine mortgages.

Obviously, there's the security aspect with the charge over the vessel, rather than a property in the case of buying a house. But there's other other things that are kind of similar as well. For example, if you're buying a used vessel, you will need to have a survey or evaluation completed by a competent Marine Surveyor and provide a copy of that to us as the lender so that we can confirm that we're happy with the vessel in the condition that it's in, and the value in the price that you're sort of paying for it.

There's also the element of insurance where you need to make sure the vessel is adequately insured that way as the lender and noted as as an interested party. So there's all these various different steps beyond just actually having the credit approved. And the app gives us a great way to kind of connect with our customers and send push notifications, etc. So keeping them informed of the journey from quote through to completion and gives them clear visibility through the the application tracker that we have in the app.

So once you've downloaded the app, you'll then progress through the application process providing us with your personal information income expenditure, declaration, assets and liabilities, as you would for most sort of financial applications, then we pull in some of the the technology that's being used fairly widely these days in lending or in the fintechs.

By putting that into use in the into the leisure marine space, and giving the customer the opportunity to connect up their bank account through open banking so that we can verify their income and expenditure without them having to provide additional documentation, thus making it convenient, quick, simple.

Further down the line, a we look to automate some of our processes further as well. We can automate the validation of income and expenditure through those, we're obviously using credit referencing data as well to inform our credit decisions. And again, the customer can just give permission through the app. And that data is then provided to us from the various credit referencing bureaus that we that we use.

Brendan Le Grange 12:52

Yes. So as much as it might be an underlying asset that not many people have funded, the process from a lender's point of view, from the back end, is very familiar.

I guess, the tricky part for you is the the asset. I should imagine, it's one of those loans where it's secured. But you ideally don't want to go back and take ownership of a boat and pay pay the mooring fees and things

Joe Dalton 13:17

Most definitely, yeah. And equally, you know, this is consumer finance that we're providing - it's heavily regulated.

But even without the regulation, you know, we have a moral duty to make sure that we're lending to people that can afford to pay us back unless they're, you know, dramatically unforeseen takes place, heaven forbid, but in the vast majority of cases, through some proper due diligence at the beginning, we can ensure that we're lending to customers who can afford it, and who will repay us. Because as you quite rightly say, and the last thing that we want to do is have to repossess a vessel. So there's an element of validation of the value of the vessel, we touched on a survey and valuation for used vessels, desktop valuations, etc, come into play, of course, and obviously, the credit worthiness and affordability status of the borrower themselves.

Brendan Le Grange 14:02

Yeah. And I think that's also where the app approach works really well. And having that data at your fingertips while you're starting the journey, you could sort of see yourself maybe New Year's and make a resolution, yeah, be a bit more adventurous and you could start a process you don't understand and find yourself confused, falling behind ,trying to work out what's happening, bumping up into these things like oh, now I need to find a surveyor and I need to find insurance, I need to do this. Whereas in an app and having it there while somebody is even in that browsing stage of that check in the affordability stage, I think takes away a lot of that sort of human error risk that comes in these sorts of decisions.

When we were buying a house here you know, you've got to set out a certain amount of budget for the home and inspection - well, for several home inspections because you're probably not going to get the first house - and that helps you set that budget.

So when the time comes, you know, okay, I need this money for a solicitor this money for anything much better than finding out later.

Joe Dalton 14:57

There's a lot of things to think about beyond just the finance.

I mean, from the outset, you know what type of boat to buy? What size of boat? Do you buy a motorboat, a sailing boat? Do you buy new to buy used? Who do you trust? Who do you Who do you speak to? You know, where do you go them for for that particular boat, or the particular dealerships? And then you know, further down the line, obviously, this is how you're going to find the vessel, how you're going to pay for it, how you're going to make sure it's safe and insure it? And then how do you use the thing? I mean, do you do have to have lessons? Do you need a licence? Then we move to maintenance? And what's that going to cost? And who do you go to? And where do you keep the vessel, you know, the list goes on and on and on.

And actually buying a boat can be quite complex and daunting, with a lot of things to think about. And I guess that Salt, one thing we're striving to do is to try and make buying a boat simpler, so that more people can can enjoy being on the oceans or the rivers and waterways.

And at the moment as we're coming in, we're looking at the finance.

That's one small area, but it's our our initial product, the area that we can help we can simplify the funding process for people. But then we have aspirations for salt to become more than just a financing platform. You know, we envisage becoming a bit of a one stop shop where you can add insurance into your your quotation, servicing for the vessel moorings, potentially, etc, etc. and grow the app into this one stop shop that takes up more of that buying process and simplifies more of that buying process for more people.

Brendan Le Grange 16:27

On talks of ambitions as you say, you're in the launching process, you're nearing the end of FCA approval

Joe Dalton 16:33

walk before I start to run?

Brendan Le Grange 16:37

Didn't mean to make it sound quite like that. But yes, you're you're in the early launching stages, you've got a busy year ahead of you. What are your plans for 2023 and the full launch of Salt?

Joe Dalton 16:50

Yes, as you quite rightly say, you know, right, just at the point where we're expecting to receive the thumbs up from the FCA and very shortly in the coming months, and we are forging ahead with our sponsorship of the Boat Life events, we won't be able to accept applications at the time.

But we will be providing customers with the ability to get indicative quotes and join our waiting list so that they can be ready for the spring and the season ahead.

Once we've got the thumbs up from the FCA, we are very much in a position to launch the texts ready to go our compliance and processes are in place, we have the capital lined up to lend out to customers. So it should be a short period between the thumbs up and us actually launching. And then really, we just want to help as many people as possible this this season, get out onto the water. And then as we get towards the end of the year, and we pass through the summer season, we will be very much looking at the further enhancements to our proposition.

So first in line is very much insurance and consolidating with a partner. So we've struck a partnership with Pantaenius, very well known yacht insurance business that provide a fantastic product. And as we get towards the end of this year, we'll be looking to start our technical kind of plans and processes and integrations as to how we can make adding insurance as easy as kind of ticking a box ticking a box through the sole tap.

When you go on holiday, or you book a hotel, or booking.com or whatever, there's always that you know, you want to add insurance for x pounds per month and you just tick a box and we envisage trying to make it as simple as possible. And with that ultimate goal in mind, it then helps to remove duplication for customers in having to provide salt with the information and then having to go to an insurance provider provide the same information, and so on and so forth.

Brendan Le Grange 18:39

Yes, there's nothing worse than when you phone the call centre and they make you enter your credit card number, and then the first thing they say is what's your credit card number. You don't want to keep giving the same data over and over.

And you're on the road at Boat Life in Birmingham. I just quickly looked it up. It's 16 to 19 February, but you're so obviously have a presence online as well. So people that are listening, maybe they want to pursue boat ownership themselves or they just want to sort of track the story and learn a bit more. Where can they go to meet you in the team either in person this year? Or where online can they head to learn more about the salt product?

Joe Dalton 19:14

Definitely the first thing I suggest doing is visiting our website www.salt-finance.com where you'll be able to join our mailing list - we have a monthly newsletter where we share a progress on salt platform, the bills and our journey to launch and obviously that will continue as we as we do launch we also share some thought leadership articles and top tips and we have an innovation spotlight section there as well where we highlight other innovative companies and startups in the leisure marine space so it's it's well worth signing up for our our newsletter.

We will be attending various boat shows, Boat Life being the first show in the UK calendar. We then have Palma out in Majorca, Southampton towards the end of the season as well, so numerous boat shows which again, you'll hear about our activities that we have planned for these through our newsletter, or through the socials.

We're very active on LinkedIn and Instagram. So, you know, please do hit us up on the socials and follow us and like and share what we're doing help spread the word about the boat finance revolution.

Brendan Le Grange 20:20

Yeah. And previous guests of mine, Bogdan Plesevescu is the CEO of Victoriabank in Moldova and a very competent sailor, I know. So yeah, maybe we can do a How to Lend Money to Strangers combo as Salt grows around Europe.

Joe Dalton 20:33

Sounds fantastic. Yes. I mean, our goal is very much to launch here in the UK this year. That's where I've obviously gained all my financial experience. And so I understand the regulation, rather well, again, know a lot of the dealers and manufacturers and the network here in the UK, but the goal is to, you know, for Salt to become that international boat financing platform, or boat buying platform as we begin to add those other services into the proposition.

It is a niche industry, and it's amazing, the closeness or the smallness of the world, ultimately, you know, I'm constantly chatting to people across Europe and across in the States as well, you know, not just on the financing side of things, but the industry is a global industry and, and quite a close knit community. So yeah, there's definitely the opportunity to grow beyond these shores.

Brendan Le Grange 21:22

Yeah. Well, Joe, thank you again, for your time. It's been great. As I said, I'm probably more tempted than I should be to, to explore buying a boat. But yeah, great to hear Salt's story as well. I think it's always fun to hear a story of a startup going from sort of passion to reality. So I'll be keeping an eye on that. I will put the links to salt in your appearances on the show notes as well.

Joe Dalton 21:45

Well, you know, I really appreciate the opportunity. I love talking about the journey and you know, it's my passion, so happy to speak to to anybody that will listen, but it's been a pleasure talking to you today, Brendan. And you know, hopefully we'll see you on a boat show at some point during the year to come

Brendan Le Grange 22:00

Or less exciting later at a FinTech FinTech event.

But yes, best of luck for the launch, and for the season. And yeah, I'll speak to you soon.

And thank you all for listening. Please do look for and follow the show on your favourite podcast platform, and share the updates widely on LinkedIn where lending nerds are found in our largest concentration. Plus, send me a connection request while you're there.

This show is written and recorded by myself Brendan Lagrange in Brighton England and edited by Fina Charleson of FC productions. Show Music is by Iam_Wake and you can find show notes and written transcripts at www.HowtoLendMoneytoStrangers.show and I'll see you again next Thursday.