Monthly payments for Civilian Ships

[Hal]

Hello Folks,
I thought I'd bring this up just for the fun of it...

You've just gotten word that the Bank of <fill in bank on what ever world of choice here> has authorized a loan for the ship you now hold the papers to. You're well on your way to having some fun in life, along with some scary moments perhaps, and even some moments of frustration (them's the joy of life in the Traveller Universe).

But riddle me this:

The bank on that world that just authorized your loan, requires that you make payments in a monthly cycle.

Now, for the sake of argument, your ship has wandered far and wide, and has been amassing the money in order to make the monthly payment. Problem is, you're on a jerkwater world with a low population, and not even a major starport installation there for which you can make your monthly payment to the bank.

How does that money get there?

What happens if you don't make your monthly payment?

How long will the bank wait before it puts your ship on the "deadbeat list" permitting your ship to be reposessed?

It seems to me that in those circumstances, there would have to be some form of payments permitted that accepts the reality of the Third Imperium.

Thoughts?

 

[Whipsnade]

The bank on that world that just authorized your loan, requires that you make payments in a monthly cycle. (snip) Now, for the sake of argument, your ship has wandered far and wide, and has been amassing the money in order to make the monthly payment.

The two parts I snipped from the situation you posted are mutually exclusive. Neither can be true at the same time so the situation will not exist.

As the fairly recent property bubble and subsequent credit crunch have reminded everyone, banks aren't suppose to hand over megacredits to every Tom, Dick, and Eneri who fills out the paperwork.

You want a ship loan? Then you submit, among many other things, a business plan. If that business plan requires you to wander "far and wide" and if the bank somehow still accepts it, the bank isn't also going to be stupid enough to still insist on monthly payments when they know you're off schlepping BBQ groat tenders to Jerkwater-V.

When we remember that the fictional people within the OTU are supposed to be at least as smart as real people in the real world, most of the "problems" like this one aren't going to happen.

 

[Hal]

The two parts I snipped from the situation you posted are mutually exclusive. Neither can be true at the same time so the situation will not exist.

As the fairly recent property bubble and subsequent credit crunch have reminded everyone, banks aren't suppose to hand over megacredits to every Tom, Dick, and Eneri who fills out the paperwork.

You want a ship loan? Then you submit, among many other things, a business plan. If that business plan requires you to wander "far and wide" and if the bank somehow still accepts it, the bank isn't also going to be stupid enough to still insist on monthly payments when they know you're off schlepping BBQ groat tenders to Jerkwater-V.

When we remember that the fictional people within the OTU are supposed to be at least as smart as real people in the real world, most of the "problems" like this one aren't going to happen.

That was the thrust of my question actually

If the bank accepts that there will be times that the ship can't get to a bank to relay the money for the monthly payment, then there has to be something that would work as a financial instrument in the Third Imperium that permits payments on ships - even if it isn't on a strictly monthly basis.

For instance? Suppose the world in question has a central bank that is authorized to deal with the Imperial based banks. A payment to the bank, with instructions that the money has to be routed to a given world might work if there is sufficient traffic between that world and the rest of the Imperial worlds. But it won't work if said world rarely sees traffic that can handle the outbound payment.

Now for the "disclaimer"

I'm guessing that the bank monthly payments thingie was intended to keep things simple for the GM and players. I also suspect, that the magic of "sweep it under the rug" permits the GM to just say "you paid your montly payments" and be done with it. He doesn't have to figure out what the actual payment mechanism must be in order to handle such payments.

Me? I'm ornery enough to wonder just how those bank payments work

If I had to guess? I'd say that the banks may be lenient enough to permit a one month "slippage time" between payments simply because a freighter might be out servicing a world that doesn't have much in the way of financial links to the rest of the Imperium. However, it would appear that 8 weeks should be sufficient time to return back from the jerkwater planets and make not one, but two month's payments.

Alternatively? If a ship is at a world where the Bank does have contacts with the originating loaning bank, the Ship Owner might leave several month's payments at the bank with instructions to release sufficient funds to pay the loan payment when it comes due (per instructions of the Ship owner).

 

[mike wightman]

All outstanding monthly debts to be settled within 1 month of ship's annual maintenance.

 

[Hal]

All outstanding monthly debts to be settled within 1 month of ship's annual maintenance.

Probably even simpler is the idea that once you get to where there is a bank branch that can take a payment, all outstanding (ie late) payments must be made.

The thing is...


Most banks have this thing called "late fees".

what might be even more common is what is called an escrow account, where the person who has a loan, makes a payment into the escrow account, and that account is then accessed to make payments for when the ship can't make the payments itself. It might be standard practice to have two month's payments deposited in the Escrow account before the bank will sanction the ship heading out on its attempts to earn an income.

Keep in mind - per Whipsnade's earlier comment, it is presumed that the people populating this fictional universe are at least as smart as real people in real life. That being the case, every single player character who starts off with a ship as a muster out benefit, has an outstanding bank loan that some loan officer said "Yeah, we'll give you the loan, because you fulfill our stringent requirements and have a good business plan, yadda yadda yaaah dah!"

In reality, we know half (what, so high?!!!) of the player characters in real life wouldn't even qualify for a $20 loan, much less a $20 million loan

 

[Omnivore]

IMTU, TAS offices usually have connections with bonded couriers and will serve, for a fee to non-members of course, to handle routing of funds to an escrow account or operations account. The escrow or operations account handles monthly payments to the lender (for anyone who does electronic banking these days its a familiar process).

Similarly, most banks on Imperial worlds are accredited by one or more regional, or even empire wide, financial concerns and will route funds for a small handling fee.

 

[Hal]

IMTU, TAS offices usually have connections with bonded couriers and will serve, for a fee to non-members of course, to handle routing of funds to an escrow account or operations account. The escrow or operations account handles monthly payments to the lender (for anyone who does electronic banking these days its a familiar process).

Similarly, most banks on Imperial worlds are accredited by one or more regional, or even empire wide, financial concerns and will route funds for a small handling fee.

An Automated Clearing House for the Third Imperium would suffer from the time lags of jumpspace travel for ships carrying the information. A world in which monthly payments are speed of light (ie electronics) plus immediate (ie no one is far enough away that a wire transfer can't be effected anywhere in the world within 24 hours), it works well enough.

Problem is? How many worlds will have a TAS presence versus how many worlds do not?

My gut instinct?

Banks give a 1 month leeway time before they hit a ship owner with late fees. 8 weeks should be more than ample for a ship's owner to return from the frontier and be back within range of a bank, or service that will handle the bank's transaction on behalf of the ship owner.

 

[Omnivore]

An Automated Clearing House for the Third Imperium would suffer from the time lags of jumpspace travel for ships carrying the information. A world in which monthly payments are speed of light (ie electronics) plus immediate (ie no one is far enough away that a wire transfer can't be effected anywhere in the world within 24 hours), it works well enough.

Time lag is predictable, accountants can and will distribute interest and fees in accordance. Obviously your escrow or operating account will be on the same world (probably the same bank) as the lender. Or at least, both will have branch offices on the originating world.

 

[CosmicGamer]

My experience. Give a man a due date and he needs to pay it by then. Give a man a due date and 30 days leeway to make a payment without fees and he can ignore the due date and be 30 days late every month. Perhaps a grace period allows for transit and verification time as long as payment left your hand and was given to the "western union" office by the due date.

Like they said. Business plan. Wouldn't finance a ship if they are the type of "Traveller" who has no dedicated trading routes with repeat customers, never knowing where the next job is coming from and just scraping by every month.

I would think the mortgage terms would include an automatic withdrawal from an account at a major financial institution - probably the one financing you. Doesn't matter how you get the funds into the account, but they better be their on the due date so plan ahead.

Also there is that overdraft protection you were required to have. It would cover at least one months payment.

 

[Dragoner]

Business now often goes by quarterly accounting, given the time lag of the OTU due to communications, it wouldn't be odd for a bank to expect the payment quarterly, bi-annually or even annually. Late payments would accrue interest before being sent to collections; though interestingly enough, a lost or missing ship could be case for a rescue mission being sent...

 

[BytePro]

Your PCs survive more than a month in game time? :devil:

 

[hdan]

I go with the "settle up accounts before the annual maintenance" model. All major starports maintain records of known ships and their creditors. When you schedule your maintenance, you have to pay up your last year's debts. The starport then transmits the receipt to your bank.

Communications are slow, but it won't take more than a year to propagate the information required. IMTU, part of the data that is maintained along an X-boat route is the record of ship activity, so unless you stay away from the X-boat lanes, your bank will have a rough idea what you are up to, even if they are a month or two out of date.

Of course, merchants have been known to blow their payment money on a "sure thing" that didn't work out, and sometimes they put off doing maintenance (or even seek out unlicensed shipyards!) because for some reason, they are short. A prudent captain sends money to an escrow account at the starport they intend to perform maintenance at, and a ship with a good record may even be able to start overhauls with only an escrow account ID, though their ship may be denied exit visa until the account is verified.

And of course no starport official has EVER used this arrangement to their personal advantage.

 

[Carlobrand]

In the "olden" days, before the telegraph made life easy, loan arrangements depended on who the recipient was and what the loan was for. A loan for someone who was expected to be away for long periods took that fact into account - there's no logic in loaning for a spice ship to the East Indies and then making a demand for payment while the ship's halfway there. However, the Traveller universe is a bit better connected - and better off technologically - than the 16th-17th century world, for all that its communications are limited to jump speed.

My though is your ship has a coded doohicky buried in the hull whereby the local starport officials (A/B/C ports) can query it for your loan status and the bank officials can give it updates as you make payments. All payment information for all payments made at a given world goes out with outgoing ships, makes its way to various district offices in each subsector capital. So long as payment information keeps flowing in more or less regularly there's no problem, but if there's a significant break - say you're more than two or three months behind - the district office closest to your last known stop (from the data available to it, which of course is likely to be several weeks old) is authorized to issue a foreclosure notice.

That's not the end of the world because, in a world governed by weeks-long delays in communications, you might well have caught it up before they sent the notice out or before the place you're at receives the notice. The banks of the milieu would know that. So, there are provisions to address that situation: show up at your next significant (A/B/C) port with enough to catch up your loan, and the bank office there will gladly accept it, update your doohicky, and send an alert rippling out that overrides the foreclosure order. So long as the alert moves faster than you - and it almost certainly will - and with your doohicky to confirm your status, you will most likely see no problem.

However, show up short, and - well, maybe best you don't show up at all. You can go to court to try to fight the foreclosure, or you might want to consider just avoiding A/B/C ports ... and hope you can avoid the bounty hunters that will soon follow ... until you've actually got the cash to get yourself current.

Remember also: in a foreclosure situation, the loan-holder's only entitled to the outstanding loan amount plus certain fees and costs associated with the foreclosure; if your ship's value exceeds that, you're entitled to the remainder. If you're 20 years into a 40 year loan, for example, the local bank might not be thrilled with the idea of handing you several million credits of its precious cash reserves so that it can have a 20-year old free trader that might sit on the local market for a year. The longer you've owned the ship (and the better you've maintained it), the more forgiving and willing to negotiate the local bank's likely to be, negotiating extensions or possibly even forgiving a month or two if you come in with a partial payment - and a suitable fee for the service - so that it can avoid seeing its funds tied up that way.

Even if you're upside down on the loan, a bit of cash in the here-and-now may persuade them to be lenient: there's a certain short-term benefit in the local bank having cash right now that it can lend out and make money from, as opposed to having to spend its own time and money gaining a judgment and then disposing of the ship. (This is when it pays to plan ahead - you're in a better bargaining position at some backwater branch than at a major hub port.)

 

[jshiggin]

Hello Folks,
I thought I'd bring this up just for the fun of it...

You've just gotten word that the Bank of <fill in bank on what ever world of choice here> has authorized a loan for the ship you now hold the papers to. You're well on your way to having some fun in life, along with some scary moments perhaps, and even some moments of frustration (them's the joy of life in the Traveller Universe).

But riddle me this:

The bank on that world that just authorized your loan, requires that you make payments in a monthly cycle.
.
.
.
Thoughts?

For starship owners, as for farmers in the real world, it makes more sense that the payments be made annually rather than monthly (farmers because the crops don't come in on a monthly basis, but on an annual one, starships because annual maintenance is such a convenient time to pay the bills).

As to the mechanism, well, as long as you're in or near Imperial space, drop it off with the bank branch in the Starport. Since you'll be doing annual maintenance at a large starport (B+), it will have a branch.

If you're not in Imperial space...

Well, let's just say that you'd better be in Imperial space