Acquiring an aircraft is a lifetime investment. It may not be feasible to purchase it at an outright price but we can work closely to get the best finance options. There are many verticals and types of aircraft purchases. There are piston aircraft, business jets, private plane, and general aviation aircraft. From purchasing new aircraft to leasing your aircraft, understanding the loans and finding a better rate from the right lender is crucial for any airplane buyer. Also, analyzing the industry trends on the lenders offer in the general aviation, sector can help in decision-making.
Things to be noted before opting for aircraft financing
Before applying for private aircraft and loans, it is compulsory to research the track record of the lenders. How many years have they been in the aviation business? What is the term of the loan? Are there any other benefits offered by the company?
Term of Loan
The other important aspect to know is the loan term offered by the lender. The loan amount that is approved and the payment options are available. Are there any specific other aircraft finance financing needs for different aircraft? The cash flow statement of the loan is also a must before opting for aircraft loan financing.
Another important process to be analyzed is the application process for aircraft loans and insurance. What are the terms and conditions? What is the interest rate offered? What are the competitive rates and financing options available in aircraft financing? Are there any aviation industry exclusives provided along with the loans? How the lender selects the qualified applicants for the purchase of aircraft. How long will it take to secure the loans? The collateral that will be required for aircraft financing.
The types of aircraft loan available are
In this business method, the aircraft is purchased by customers paying outright cash. There are certain advantages and disadvantages to the same.
a) In this method, you get to immediately get your aircraft.
b) You get limited access to make huge savings on the interest
The downside would be
a) Large requirement of capital
b) Impacts liquidity of the client
Aircraft leasing is divided into two parts. One is
In this way, the lesse gets the license to operate the aircraft. At the end of the term, he returns it to the lessor. The advantage of this type of airplane leasing is that it offers flexible payment options and very low rates of monthly payments. The lessee's responsibility is limited to operating the aircraft.
This is also another form of aircraft financing. In this option, the lessee bears the maintenance charges. But at the end of the term, the lessee can purchase the aircraft.
Loans and Mortgages
When it comes to aircraft financing needs, loans, and mortgages rank higher in the aviation industry. The rules differ to specific aircraft financing needs. There are two types of aircraft financing options in loans and mortgages,
Traditional Bank Loan
When choosing the traditional bank aircraft loans, the procedures vary for private aircraft, business jets, or even general aviation aircraft. The banks may provide fixed or variable interest rates. However, in certain circumstances, the banks may offer reduced customized interest rates to the parties. But there is also a downside to the same.
a) The interest rate can be variable or fixed.
b) It has a lengthy approval process
c) Collateral is compulsory
Legal and Regulatory Compliance
At PNC aviation finance, we work closely with our customers to ensure that they adhere to international safety and operational standards. We also verify aviation insurance , leasing and other documentation to verify if they are compliant with the existing rules and regulations.
Risk Mitigation Policies
Our aviation insurance policy provides a comprehensive cover against risk and damages. Whether its for their own aircraft , business jets or general aviation aircraft, we offer great rates on our aviation insurance policies. It also protects the client against currency fluctuations and interest rate risks.
Aircraft Finance is a multifaceted domain that is ever-evolving to suit the customers needs. We at PNC Aviation Finance understand the clients needs and their business needs to provide solutions that make our clients flying experience a breeze.