If you have tried to finance anything lately, you know that it is becoming harder and harder to get a good loan. The same holds true for those who want to buy a plane and don't have the funds to purchase it outright. There are some things you can do however, to make the process of obtaining aircraft financing easier.
If you are buying your first plane, it might be a good idea to sit down with a financial advisor to get everything in order before you approach a loan officer. The kind of loan you are able to get will depend, in part, on the kind of plane you are interested in. Your advisor will be able to tell whether or not you can qualify for the financing, and if not, what you need to do to make yourself more attractive to financial institutions.
Your ability to pay the loan back is often the first consideration when lenders look at an application. They do want to feel comfortable however, that you are not overpaying for something. If, for some reason, you renege on your loan, they don't want to end up with something on their books that they can't get rid of. Older planes are riskier for loan officers and a harder sell when it comes to asking for money.
Before you go to all the trouble of applying for a loan, your accountant might advise you to consider a lease. If you don't need the tax depreciation, that might be the better option. All things being equal, you could ask for a leasing proposal and an outright purchase proposal. A lot of financial institutions stay out of the leasing business however, so that can limit your options.
The person actually purchasing the plane is an important consideration and one that many don't think about at first. The final decision will depend on liability, operating rules, tax considerations, and how partners or others are going to use and help pay for the plane. Whether or not a commercial business or private individual is the principal buyer might determine which financial institution ends up lending the money.
It is seldom a good idea to talk to only one lender. You need to get several proposals if you can. You should also go in asking for everything, and see how much you can get. You might not get a twenty-five year one hundred percent loan, but you can ask for it.
You don't have to accept the first proposal you are offered. Even if you don't try to negotiate by showing your preferred lender the competition's proposal, it is something you can use to obtain the terms you want. If the proposals are similar, you might want to take the offer of the lender with the most experience financing aircraft.
Private planes are convenient and can be good investments. Most owners prefer them to commercial flight. Getting a good loan makes the experience even better.
If you are buying your first plane, it might be a good idea to sit down with a financial advisor to get everything in order before you approach a loan officer. The kind of loan you are able to get will depend, in part, on the kind of plane you are interested in. Your advisor will be able to tell whether or not you can qualify for the financing, and if not, what you need to do to make yourself more attractive to financial institutions.
Your ability to pay the loan back is often the first consideration when lenders look at an application. They do want to feel comfortable however, that you are not overpaying for something. If, for some reason, you renege on your loan, they don't want to end up with something on their books that they can't get rid of. Older planes are riskier for loan officers and a harder sell when it comes to asking for money.
Before you go to all the trouble of applying for a loan, your accountant might advise you to consider a lease. If you don't need the tax depreciation, that might be the better option. All things being equal, you could ask for a leasing proposal and an outright purchase proposal. A lot of financial institutions stay out of the leasing business however, so that can limit your options.
The person actually purchasing the plane is an important consideration and one that many don't think about at first. The final decision will depend on liability, operating rules, tax considerations, and how partners or others are going to use and help pay for the plane. Whether or not a commercial business or private individual is the principal buyer might determine which financial institution ends up lending the money.
It is seldom a good idea to talk to only one lender. You need to get several proposals if you can. You should also go in asking for everything, and see how much you can get. You might not get a twenty-five year one hundred percent loan, but you can ask for it.
You don't have to accept the first proposal you are offered. Even if you don't try to negotiate by showing your preferred lender the competition's proposal, it is something you can use to obtain the terms you want. If the proposals are similar, you might want to take the offer of the lender with the most experience financing aircraft.
Private planes are convenient and can be good investments. Most owners prefer them to commercial flight. Getting a good loan makes the experience even better.
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You can find complete details about different aircraft financing options and more info about a reliable lender at http://www.milehighmoney.com/about right now.
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