Commercial airlines are becoming increasingly crowded, and finding a flight that meets your needs can be complex. Even if you book the right flight for your schedule, delays and cancellations are not uncommon. There is no guarantee you’ll make it from point A to point B quickly or safely. So, what can you do? For most, owning an aircraft is not a first option.

Nevertheless, obtaining an aircraft of your own is becoming an achievable option. The key to getting a private plane is understanding how airplane financing works and how you can optimize the process for the most rewards. Here, we’ll go over the three primary methods of financing an airplane that is available to potential buyers. Keep reading!

3 Ways To Finance An Aircraft

Aircraft financing can be a challenging endeavor, as there are several paths one can take to finance their dream airplane. To make the process easier, we’ve outlined three standard options that aircraft owners use when it comes time to buy an airplane:

1) Traditional Aircraft Loans

Like any other significant investment, such as a house, car, or boat, your traditional aircraft loan can be either fixed-rate or floating rate. Furthermore, some lenders offer an alternative option by providing hybrid loans that involve a floating rate plus the choice to buy a “swap.”

Simply put, you can secure a low rate and gain from early payoff and rising interest rates, an opportunity beneficial in this increasing rate era. Traditionally, loans range between 30 months to 120 months with 240-month loan amortizations.

2) Asset-Based Loans

With the last fifteen years bringing aircraft ownership closer to individuals and businesses, asset-based loans have become a top choice. Few organizations offer this concept, but with substantial advantages such as no requirement for financial disclosure or covenants, limited to no personal guarantees, and non-recourse.

3) Aircraft Leases

For companies that need to use aircraft, leasing can provide a more cost-efficient alternative than purchasing. Leasing can be beneficial for cash flow management and is also advantageous regarding federal income tax considerations, sales tax considerations, and accounting treatment. 

Different types of leases are available depending on the intended usage of the aircraft.

Get Competitive Aircraft Financing Solutions By Working With AirFleet

Traditional aircraft financing solutions can be difficult to navigate. Still, with the help of AirFleet Capital, it’s much easier to get the plane you want. AirFleet offers a variety of loan and financing options tailored to your needs so you can make an informed decision quickly.

Our easy-to-use airplane loan calculator is designed for customers who need straightforward, competitive financing to obtain their dream aircraft.

So, if you’re looking for a reliable and experienced aircraft financing team, we can help you. We’ll make the process as simple as possible, get in touch and learn more about our tailored solutions!