Alternative Financing In The Shipping Industry

In the decade since the global financial crisis, ship financing has undergone considerable change. Traditionally, debt financing with banks and equity financing were the most common methods used by shipping companies to raise money. However these forms of traditional financing have been increasingly replaced by alternative sources of funding such as convertible debt, private equity and sale-and-leaseback arrangements. This trend has increased over the past year caused by, in part, the volatility in the sector as a result of the COVID-19 pandemic, and certain banks, most notably many European banks, exiting the sector and selling their shipping portfolios or not taking on new business while existing loans are paid off.