Financing an Aircraft in 2012

Charles Lindbergh relied on the credit of several St. Louis businessmen to raise the capital for his dream plane, The Spirit of St. Louis, back in 1927.The numbers are much higher now, and most individuals and businesses still finance their aircraft purchases.

A few weeks ago, we reported in Corporate Jet Insider about the potential for an improving private aircraft market. Some positive signs in the pre-owned market in January 2012 indicated a turnaround. Inventories are lower, jets are spending fewer days on the market, prices are increasing, and the number of transactions is higher.

This is all great news for sellers, but buyers still have time to snatch up a great deal. And finding financing is the next step. This aspect of potential aircraft ownership is a necessary hurdle for most buyers. Here are some trends in the aircraft financing world right now.

  • Lenders demand a relationship with you, not simply a one-loan-stand.
  • 20 rule: Loan term and age of aircraft should add up to less than 20.

Thus, you’re going to have better luck financing your aircraft if it was manufactured in the past five years and if you already have a relationship with a financier.

As with any major purchase, you’ll want to take your time making a decision and seek out the help and advice of professionals. There are many steps to purchasing a jet, everything from financing to pre-purchase inspection to simply finding the right aircraft for your needs. The experts at L & L International can help you every step of the way.

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