You may have wanted your aircraft for a long time now, maybe since you were little, dreaming about all the possibilities owning a plane may bring. However, once we reach adulthood, it can seem idealistic; but it doesn’t have to be.
If you’re part of the aviation industry or a pilot, you may be closer to bringing that child’s dream to life. You probably heard or read about aircraft financing by now, but do you really know what that means? In this piece, we’ll go through everything you need to know about aircraft loans. Keep reading!
How Do Secured Loans Work?
In a basic secured loan structure, the airline or company borrows money from the lender. Usually, the lender gets a security interest in the aircraft to ensure they get their money back. The airline or company owns the airplane first, but they might lease it to someone else later.
Aircraft Financing Structure
Companies can finance aircraft in many ways. One way is an operating lease, which means the company renting the aircraft pays for it. Another is a finance lease when someone else pays for it and rents it out to you. There are also leveraged leases and sale-leaseback transactions.
Many variables separate these leasing structures, yet they all have several traits in common. They include:
- The aircraft isn’t owned by the airline or leasing company.
- After the lease, the airline or leasing firm returns the plane to the lessor (although, in some circumstances, the leasing company can buy it).
FAQs about Aircraft Financing
Can I Apply For A Loan With Partners?
It’s possible to give aircraft loans to partners of up to four individuals. As a partnership, you’ll need to decide how you’ll register the aircraft, and all partners will need to be able to sign closing papers.
Is An Entire Tax Return Necessary?
It is necessary; since aviation companies tend to collect complete tax returns, including schedules, statements, K-1s, and W-2s for both personal and business returns.
They do this to get a complete financial picture, including putting back any non-cash losses or other earnings that don’t show up on the bottom line. It also allows them to better understand your financial status, which eliminates some of the back-and-forth queries we might otherwise have.
Air Fleet Capital: Keep Your Hopes Sky-High
Now that you understand how aircraft financing works, you’re ready to decide if you want to start the process with us. AirFleet Capital is a company that offers outstanding and reliable aviation solutions. We aim to provide high-class services and great aircraft loans to our clients.
Allow us to help you make your aviation dreams come true . Click below to check out aircraft loan programs and take a look at the aircraft loan calculator to figure out what your monthly payment would be!
