Aircraft finance can be a complicated process, especially for first-time buyers. Lenders will consider many factors when approving an application for financing, and it can be challenging to know what to expect. Making smart decisions and understanding the basics of aircraft finance are crucial for a successful purchase.
Here, we’ll cover everything about loan requests and which documents you should expect the lender to ask for. You’ll find how to understand this process and tips to start it. Keep reading!
How To Understand The Loan Request As Borrowers
A borrower needs a basic understanding of the loan request. Some of the things you should expect to be asked for are a background and credit check. Also, they’ll need to look for some trends of the borrower:
- You’ll have to provide the name, address, and State of the organization. Also, they’ll need the borrower’s birth date and tax ID. This includes any guarantors’ information too.
- Information on who the principal borrowing/operating entity is, including short biographies.
- Each borrower will also need 3 years of tax returns and financial statements.
- Details on the aircraft they will purchase, any loan structure preferences, and its purpose.
5 Tips To Start Your Aircraft Financing Process
- Work With A Trustful Company: The first and most important step is working with a trustworthy company. They’ll have the experience to help you through the process and get the best financing options for your needs.
The company should also guide you through each process step and keep you updated. Choosing the right lending company is essential to make this process as smooth as possible.
- Understand Your Financial Picture: You’ll need to know how much you can afford to spend on an aircraft and what kind of down payment you can make. It’s also essential to have a good credit score when applying for an aircraft loan.
- Down payment: A down payment is typically 20-30% of the purchase price of the aircraft.
- Get The Paperwork Ready: You’ll need to have some paperwork ready to get an aircraft loan. This includes tax returns, business financials, and personal net worth information.
- Credit Score: Your credit score is essential when applying for an aircraft loan. A good credit score will help you get a lower interest rate on your loan. Considering your application, you shouldn’t have less than 700 for aircraft finance programs.
- Apply & Get Approved: The next step is to apply for an aircraft loan. You can do this through a bank, credit union, or an aviation finance company. Once you’ve submitted all your information and documentation, the lender will review your application and decide.
It’s crucial to compare rates from different companies before choosing one. You should also read the fine print carefully to understand all the fees associated with the loan.
- Clear All The Purchase Details: You’ll need to check a few more things off your list before setting a closing date if you want the transaction and financing to go according to plan.
Before closing, you’ll need to understand the aircraft’s worth, schedule a pre-buy inspection, and reach an agreement on the purchase and sales contract with the seller. Lenders will also want to see that you have insurance before they approve your loan.
- Close On The Aircraft: The aircraft finance program should give you the entire list of documents required to close. Once all the paperwork is in order, you can close on your aircraft loan and take ownership of the plane.
Work With Airfleet Capital & Benefit From Our Aircraft Finance Solutions
If you’re interested in an aviation finance program, AirFleet Capital can help you. We have competitive rates and terms, high-end aircraft loan solutions, and a team of experts ready to assist you. We have more than 20 years of experience, so we understand the industry.
We offer a wide range of aircraft finance programs to meet the needs of our clients. Contact AirFleet today to learn more about our services and how we can help you finance your dream aircraft. We’re ready to get you up in the clouds!
