Tags: Aircraft Financing, Asset Financing, Aircraft Financing Professionals, Asset Financing Process, Aircraft Financing Options

Each year you should be upgrading your business and its worth. Adding assets to your company’s portfolio grows its overall value in a long-term way. 

Getting aircraft financing in a speedy and organized manner can revolutionize your business. 

Read on to learn more about aircraft financing and why it’s helpful.

Aircraft Financing Secures a Useful Asset for Your Business

Aircraft financing refers to an arrangement that lets you acquire an aircraft in a way that’s convenient for your company. Rather than going with a traditional bank, you can link up with a private company that will look into different prerequisites. 

Banks place the majority of their decision on credit score and borrowing history. Some aircraft financing pros focus on assets.

These companies exist to help companies grow, so they’ll want to know that you’re getting the plane for the right reasons. You will sit down with them and let them know how often you plan to use it and for what purpose. 

They will consider these sorts of qualitative matters when making a decision. 

Understand the Asset Financing Process and What it Entails

Learning about asset financing as a whole will help you better understand aircraft financing. 

Financing companies provide asset financing for all sorts of equipment, from bulldozers and overhead cranes to demolition trucks and company vehicles. The companies that facilitate these transactions look at things like the borrower’s balance sheets and accounts receivable. 

You can compare the asset financing of an aircraft to a private individual getting a loan from an automobile dealer. An auto dealership will look at your employment and ability to repay an auto loan in the same way that a private airplane dealer looks into your company’s ability to honor the loan. 

The plane itself is the asset that is held in collateral since the lender gets to repossess the plane if you default on the loan.

Research the Various Financing Models Available to You

Look into the many different transactions that finance companies offer so you can choose the best option. 

Some of the agreements you can use to get a plane include a finance lease, operating lease, limited recourse loan, and asset refinance. These agreements all have their differences and nuances that come into play. 

With an operating lease, you get the peak value from the aircraft on a rental basis. Compare this to the way that private individuals lease new vehicles.

You’ll get to hold onto the plane for a timetable that you and the lender agree to. Finance leases let you take ownership of the aircraft once you’ve made all of your payments. 

A limited recourse loan lets you purchase an aircraft and pay for it while you own. All of these structures can be applied to an asset refinance, which lets you change the terms that you and the lender originally agreed to. 

Bring Additional Assets

In most scenarios pledging additional assets will make for a higher loan amount. This can be anything from unencumbered real estate to yachts or aviation equipment.

Since you’re bringing assets to the table, most private companies will issue you the loan much quicker than you’d get with a bank. This helps you grow your portfolio without having to go through the traditional acceptance process. 

Find a Company That Offers Products That Serve You

Researching aircraft financing professionals will give you a headstart when you need a new plane. Find out how long the company has been in business, what types of loans they specialize in, and where their capital comes from. 

These are often specialty companies that have deep relationships in the aviation industry. They mostly get their capital from private investors. 

As such, they’re not bound by the same limitations and regulations that banks and credit unions have to stick to. Some companies can close in as little as four weeks. Both parties win in this situation, and you can build a rapport that will last for years. 

Consider the Different Kinds of Aviation Equipment Available to You

The value of the loan you’ll get will depend on the type of aircraft you’re purchasing. As such, you’ll need to do some research into the kind of plane that you want. 

Consider the year and value of the airplane that you need so that you can choose which assets you need to secure it. Aircraft financing is useful because they’ll give you a customized contract that suits your business’ specific needs. 

Many aircraft financing professionals will also include service plans as part of the agreement. This is crucial since annual aircraft maintenance costs range between half a million and $4 million. 

Study the interest rates of your agreement to figure out how much you’ll need to repay over the years. Prepare a down payment for whatever financing you need, and you’ll get the most reasonable terms. 

Explore All Your Financing Options

If you’re looking to get a private plane for your company, looking into aircraft financing can serve you well. Consider these tips when you’re looking to add an aircraft to your fleet. 

Our company has deep relationships and experience in fields like aviation and can set you up with the agreement that works for you. 

Take the time to get in touch with us to learn more about the services we offer!