Monday, 26 August 2019
Purchasing a private aircraft, such as a small-to-medium-sized plane or helicopter, can afford a comfortable and convenient way to travel.
One of the most important questions to consider during the purchase process is how to finance it. Aircraft loans provide a financing solution, but there are some key things to consider before seeking an aircraft loan.
Numerous private lenders and banks offer aircraft loans — that is, any loan that's used to purchase a full or partial ownership share in an aircraft. How loans are structured depends largely on the type of aircraft involved.
For instance, many lenders may offer aircraft loans to finance the purchase of new or used:
Other lenders may finance private jets or offer aircraft loan refinancing.
Loans for different types of aircraft may differ in terms of maximum length of repayment, the interest rate and the required down payment.
The amount of financing a lender is willing to extend can vary.
Financing an aircraft purchase and the available terms is contingent on several factors, including the age, make and model of the aircraft; how the aircraft will be used; the loan amount; and the down payment amount.
Age is one of the most important considerations for aircraft loans. Qualifying for a loan may be less difficult for a newer aircraft versus an older one that may have lost a larger portion of its value to depreciation. Lenders also consider the overall condition of the aircraft, its maintenance record, flying time and accident history. All of these factors contribute to determining the aircraft's value.
To offset some of its risk, a lender or financing company typically expects a down payment against the loan. The size of the down payment may be tied to the aircraft's purchase price and the type of aircraft involved.
Purchasing an aircraft is a sizable investment and it can help to have professional guidance along the way. If you are interested in financing an aircraft purchase, connect with your financial advisor to learn how to make your aircraft ownership dreams take flight
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