An aircraft loan is funding made available for the purchase of a new or used aircraft, or to cover the expense of upgrades.
Types of Aircraft for Sale
You can obtain an aircraft loan for several different types of aircraft. These include jets, sport aircraft, antique or classic aircraft, military aircraft, float planes, or helicopters.
Pricing and Interest Rates
The cost of the plane or helicopter will depend on the type of aircraft, the make, model, age, avionics (electrical hardware) and modifications. The total time that the engine or engines have been operating as well as the body of the craft will also affect the cost. The pricing can range from $30,000 to millions of dollars.
Interest rates will also be affected by the above factors as well as the state in which the aircraft will be used. Other factors that will affect the interest rate include the intended usage, meaning personal use or business use, and the borrower’s credit report. Interest rates on aircraft loans can be fixed or adjustable.
There are several term options available depending on the need for upgrades and repairs. A 3 or 5 year loan term, fixed or adjustable, is a good option if no major repairs or upgrades need to be financed. Some financial institutions will offer a 5 or 7 year balloon option. With a balloon loan, the aircraft will have to be refinanced, sold or paid in full at the end of the term. Interest rates are varied with this option.
If the aircraft is in good condition, you plan to own it for a long time, and don’t feel the need to make major upgrades every few years, you can get a fixed rate loan for 15 or 20 years.
Some important items to know to finance your are:
- How much money do you really need?
- Do you know your exact FICO scores?
- How do you plan to repay the loan?
- Who is going to borrow the money? You personally or another legal entity?
- What assets can you pledge to secure your loan?
Make sure you know you are pre-qualified before you apply. Our free business capital search engine will allow you to see the funding programs and lenders that are available to you and then you choose those you wish to apply for.