Whether you fly for business or pleasure, financing your aircraft purchase is a critical step. You might have the model in mind, the size, and even the color. Now all you have to do is find the money. Requesting a loan from the bank or someone close to you might seem like a fast way to finance your aircraft; however, you might want to consider making a smarter decision.
In this blog, we’ve put together 7 steps you must follow before purchasing your aircraft to find the best deal possible.
The Best Aircraft Financing Step-By-Step
Find the right aircraft
The best way to find the right aircraft is by doing your homework. You don’t want to purchase a plane that is too small or too large for your needs. Additionally, make sure you research the current market value of the type of aircraft you are interested in and keep it realistic about what you can afford.
Pay attention to timing
If you want to finance, start the process as soon as possible. The earlier you start, the more likely you will receive a better interest rate. You may get a general idea of financing costs and conditions by chatting to a lender about the airplane model, model year, and anticipated purchase price before signing a letter of intent to purchase an aircraft.
Have An Expert With You For Shopping Advice
The best way to purchase an aircraft is with the help of an expert. Have someone you trust go shopping with you and get a second opinion on the plane you are looking at buying.
An aviation consultant can help make sure that your interests are represented in the deal and assist you in negotiating the best possible terms for your purchase.
Choose Between A Loan Or A Lease
You will have to decide if you want a loan or a lease. A loan is when the bank gives you the money to purchase the aircraft, and you make monthly payments until the plane is paid off. A lease is where you pay to rent the aircraft for a set number of hours per year.
Both have pros and cons, and the decision is ultimately up to you.
If you decide on a loan, compare rates from different banks before signing anything. You can usually get a lower interest rate if you have a good credit score.
If you decide to lease, make sure you understand all the terms and conditions of the contract before signing anything. You should also be aware that some may require you to purchase a life insurance policy if you decide to lease an aircraft.
Negotiate Your Deal
Once you have found the right aircraft at the right price, it’s time to negotiate your deal. This is where an aviation consultant can help you out. They will know what to look for in the contract and can help you negotiate a better price for the aircraft.
Remember that since proposals are typically confidential, don’t send one lender’s offer to another to obtain a better deal. However, if the terms offered by a lender aren’t as good as the other bids you’ve obtained, you may inform them.
Select The Best Deal
Once you have negotiated the best deal possible, it’s time to select the offer and lock in your interest rate. This is usually done by signing a document of intent or a purchase agreement.
Be sure to read over all the documents carefully before signing anything. You should also have an attorney look over the documents to make sure you understand everything.
Wrap up the deal
The final step is to wrap up the deal and take possession of the aircraft. This usually involves a few more steps, such as getting insurance, registering the aircraft, and completing any necessary paperwork.
Make sure your aviation lawyer examines the financing paperwork. Aviation transaction attorneys do this daily and sometimes more quickly than high-priced finance counsel. They understand where the aviation skeletons are buried, having seen them all before.
Get Your Aircraft Loans With Experts
At AirFleet Capital, we are aviation enthusiasts serving other aviation enthusiasts by financing your aircraft. Whether you’re looking to purchase your first aircraft or upgrade to a new airplane, we can provide you with great loan options at the most competitive rates.
We deliver exceptional service and maintain absolute satisfaction with our customers. Thanks to this, we have become one of the largest aircraft financing originators in the United States. We strive to make your whole aviation experience as fun and exciting as possible from the beginning.
