People who are dressed smartly are smiling and beckoning at you from afar. As you gaze around it's light and airy, mineral water and mints are laid before you.

There's the odd comatose marine journalist who has taken advantage of the hospitality at an earlier reception. But he's clutching a goody bag as he snores and no one seems to mind ( harsh but fair, I'd say - Ed ).As an arm goes round your shoulder they want you to know you're among friends.

Yes, the money men have you now. You've wandered on to a boat show stand run by a bank.

With low interest rates and a countrywide culture of borrowing it seems we can't get enough of their cash.

At the last London Boat Show they were doing very nicely thank you very much and it's still hard for them to disguise their grins - and that's just talking to you down the phone.

It is estimated that the overall market for the Marine Fund Finance Business is about £200 million. Compared to other finance sectors this isn't a huge amount, but the difference in the marine industry is that there are relatively few companies competing against each other offering lucrative loans.

It's unlikely we'll see other bigger names move in because of the massive start up costs incurred in this specialist sector.

The rewards would not justify the investment needed to compete in a market already dominated by a few established finance providers.

How much?

The average customer at Barclays Marine Finance borrows £90,000 for a boat, the Bank of Scotland lends on average £100,000 per client and for Lombard Marine Finance it is £72,000.

"March was our best ever month, " said James Crew from Barclays. "With base rates at 4% now the cost of borrowing is relatively inexpensive and they have had an effect nationwide on all lending with lenders having record years.

There is a greater appetite to borrow and there is less stigma about it."

Until August 2001, Barclays Bank Plc traded as Mercantile Credit Marine Finance. But then they decided to increase their presence in the market place using the more familiar name.

"We estimate one in four people in the UK are touched in some way or another by the Barclays brand and dealers like to use the name Barclays in their showrooms, " said Crew.

Referrals from dealers and brokers are, of course, very important to all the marine finance houses and the availability of finance is a powerful selling tool.

The lenders agreed that by using a marine mortgage or loan, customers find it more comfortable than if they were putting their house on the line as collateral.

"People can release equity from their property, by and large it works out a little bit cheaper because you're spreading it over a longer term.

But people are very mindful that their bricks and mortar is the roof over their head while the boat is effectively their 'toy' - it's wise to keep them separate."

If you borrow from a bank they will also ensure the deal is kosher and will want more than surveys to sort the paperwork.

"If a dealer is given cash they might not go the extra mile to find all the title that may be required, " added Crew. "We need to protect the bank's and customer's money."

This is one reason why finance houses insist that for loans of, say, over £50,000, vessels are registered; this also applies if they are going abroad.

Trends nationwide

It may be tempting to think of big borrowing as a southern phenomenon - cash rich, time poor city folk heading to the expensive marinas on the M27 Riviera at the weekend. But if anything the regional trends are the opposite - it's places like Manchester, Birmingham, North Wales and Scotland where finance is becoming increasingly popular.

Seasonal trends are also harder to generalise about these days. Usually there's a peak in spring but last year Barclays' busiest month was November.

The season is now much longer for two reasons: there are fixed costs with boat ownership and you have to berth it, insure it and maintain it so you may as well use it for as long as you can.

Also boat manufacturers can't hold all their stock for six months just because everyone wants their boat in spring.

Yacht deliveries, and the need for finance, now occur throughout the year.

Last year the Bank of Scotland had a record year and said they did £125 million worth of business. By the end of June this year they had already done £80 million pounds worth of loans.

Understandably with such a large percentage of the market place, Peter Whitehead said they're "very pleased" but he also agreed that there is only so much of the cake to go round and it would be very difficult for a new player.

"The market in terms of what is available is small compared to say the car market. But the experience you have about the industry stands you in good stead, " he said.

"You understand what you're financing and that's the key. A lot of people are borrowing the average price of a house these days, if not even more."

So you've got to look at the application quite closely to make sure they can service the borrowing, he added.

Honourable bunch

But, by and large, those that go to sea in little ships can hold their heads up as being an honourable bunch and bad debts are not the norm.

"The interesting thing about marine finance is that the book we have for mortgages and loans is extremely clean. We don't get too many problems, " added Peter Whitehead. "I think the reason is that people just love their boating - I think they'll probably get rid of the wife before they get rid of the boat." ( harsh but fair 2, I'd say - Ed ).Marine mortgages are more common than loans. Last year the Bank of Scotland provided £115 million for mortgages and £10 million for loans.

Security over the boat means a better interest rate and the Bank of Scotland, as with other companies, has a common fixed term for mortgages of 10 years. Customers can also pay off part, or the entire loan after six months without penalty.

Peter Whitehead still feels they lose a lot of customers who prefer to release equity on their homes by paying back borrowing over a longer term.

This is despite the advantages of a separate credit line, where if things go wrong you lose your boat not your home.

But unlike with the car industry marine finance companies aren't ageist and don't discriminate between a new boat and a used boat.

"We do a lot of business for new boats, but we also do a lot of brokerage boats, " said Whitehead. "You get the same rate and the customer isn't penalised for getting a brokerage boat."

With the Bank of Scotland 44% of their customers are repeat customers. Across this market sector the ratio is about 60/40 in favour of those who borrow for a powerboat as opposed to those who borrow for a yacht.

Prefer security Lombard Marine Finance only do marine mortgages and not loans. "We prefer to have security over the goods, " said Phil Cornick. "The danger with a loan is that it's a money debt.

In the event of something going wrong the lender can sue for a money debt immediately. But with a mortgage the first thing that the lender needs to do is enforce their security and then only after disposal of the security can they sue for a money debt."

So the customer is at risk of a quicker action with a personal loan than he is with a mortgage, he added.

Lombard claimed their market has developed significantly but wouldn't say how.

"Our policy is never to give away figures, " said Cornick.

The Royal Bank of Scotland Group, not to be confused with the completely separate finance provider The Bank of Scotland, owns Lombard. Like other banks they notice people borrowing greater amounts as they move up the market.

"We also get quite a few first time buyers, " said Cornick, "but we would never pass judgement on a type of boat. Some people come in to it absolutely green and are very pleased to talk to knowledge-able people who can help and point them in the right direction.

"Our pre requisite for a lend is what we call looking at the serviceability aspect and where the income stream will come from to enable the monthly repayments to be made. Sometimes people get a bit over enthusiastic. We believe in prudent lending so the customers don't get themselves into trouble."