Updated September 02, 2026
Quick answer
Lenders require a condition and valuation survey from an accredited surveyor, commissioned by the buyer. It sets the advance and it is where most deals change shape — corrosion, structural repairs and machinery condition surface here. Book it early: a finding in week one is a renegotiation, the same finding at closing is a collapse.
The Marine Equivalent of an Appraisal
A survey does two jobs at once, and it is worth separating them.
The condition half assesses what state the vessel is actually in — hull, structure, machinery, systems and safety equipment. The valuation half puts a figure on it, on a stated basis, which is what the lender advances against.
As with equipment valuation generally, the basis matters. A market value assumes an unhurried sale; a lender sizing recovery may work from something more conservative, and the two are not interchangeable.
What the Survey Covers
| Area | What is examined |
|---|---|
| Hull and structure | Plating or laminate condition, framing, previous repairs, corrosion or osmosis |
| Machinery | Main engines, gearboxes, shafts, steering, generators, hours and service history |
| Systems | Electrical, fuel, bilge, fire suppression |
| Safety equipment | Present, in date, and appropriate to the trade |
| Out-of-water inspection | Below the waterline — hull, running gear, anodes, through-hulls |
| Valuation | A figure, on a stated basis, with comparables |
The out-of-water portion is the one buyers try to save on and should not. Most of what changes a valuation is below the waterline, and a survey that never lifted the vessel has assumed rather than seen.
Who Commissions It, and Why That Matters
The buyer, and for the same reason a buyer commissions an aircraft pre-buy: a report paid for by the party carrying the risk is the one whose findings can be relied on.
A survey supplied by the seller answers the seller's question. Some lenders will not accept one at all; others will only accept it if the surveyor re-addresses the report to them, which makes the lender the client.
Two practical points. Choose a surveyor with experience of the vessel type and trade — a yacht surveyor and a commercial workboat surveyor are not interchangeable. And check whether the lender maintains an approved list before instructing, because paying for a survey they will not accept is an expensive way to learn that.
When the Survey Finds Something
It usually does, and that is not a failure of the process. The question is what category the finding falls into.
- Structural or safety-critical. Generally has to be rectified before funding, and may become a condition of the loan.
- Value-affecting but not urgent. Reduces the valuation, which reduces the advance — usually renegotiated into the price.
- Deferred maintenance. Ordinary on a working vessel; matters cumulatively rather than individually.
- Undisclosed major repair. The one that ends deals, less because of the repair than because of what it implies about everything else represented.
Agree in the purchase agreement which category the seller carries, before the survey rather than after it.
Making the Survey Work for You
- Book it early, and build the timetable around it rather than fitting it in near closing.
- Budget the haul-out as part of the cost.
- Make the offer conditional on a satisfactory survey, with your definition of satisfactory written down.
- Attend if you can. An hour with the surveyor on the vessel teaches you more than the report will.
- Share findings with the lender as they emerge rather than presenting a completed report with surprises in it.
A survey is not a hurdle to clear and forget. Its condition notes become your maintenance plan for the first two years of the loan, and the valuation sets the number the lender will carry the vessel at if anything goes wrong. Read it as operating information rather than paperwork, and it earns back its cost.
Frequently Asked Questions
What kind of survey do marine lenders require?
A condition and valuation survey from an accredited surveyor, covering hull and structure, machinery, systems and safety equipment, with an out-of-water inspection and a valuation on a stated basis.
Who pays for the marine survey?
The buyer, and it is payable whether or not the deal completes. That independence is the point — a survey commissioned by the seller answers the seller's question, and some lenders will not accept one.
Does the vessel need to come out of the water?
For a lender-grade survey, generally yes. Most of what changes a valuation is below the waterline, and a survey conducted afloat has assumed rather than examined the running gear, through-hulls and hull condition.
What happens if the survey finds problems?
It depends on category. Structural and safety-critical items usually have to be rectified before funding; value-affecting items reduce the advance and are typically renegotiated into the price. Undisclosed major repairs are the findings that end deals.
Can I use a survey the seller already has?
Sometimes, but do not rely on it. Many lenders will not accept a seller-commissioned survey, and those that do usually require the surveyor to re-address the report to them. Check the lender's position before paying for anything.
Sources & Further Reading
- US Coast Guard National Vessel Documentation Center — The federal registry for documented vessels - where a preferred ship mortgage is recorded and where title is established.
- FTC Business Credit and Finance Guidance — Guidance on fee disclosure and the warning signs of predatory business credit.
- Federal Reserve Senior Loan Officer Opinion Survey — Quarterly survey of bank lending standards and collateral requirements.
Figures above describe ranges commonly seen across lenders and reflect published guidance as of the date on this page. Confirm current terms with the cited source or your lender before acting.