When purchasing private jets, many people choose to acquire financing. There are many financial institutions who offer financing on private aircraft, but their lending often depends on the size, type and age of the aircraft. Each bank will have different criteria they need to meet in order to offer financing. Some have a minimum amount requirement in their portfolio where they will not lend on a jet under a certain value. Financing a one million dollar jet requires the same paperwork, contracts and effort as a 40 million dollar jet except that the bank makes less money on the former. For this reason, some banks only focus on jets of a certain price range. Other financial institutions will only lend on aircraft 5 years old or newer; some on 10 years or newer, and some have no age restriction. Certain banks offer asset-only financing where there is no personal or corporate guarantee. Others only lend with a private banking guarantee equivalent to the size of the loan. The bottom line is not every bank will finance every jet.
However, the good news is that there are many options to meet your needs; you just have to search around. And just because a bank is not a very large, well-known, global institution does not mean that it is any less qualified to provide financing. There are many great options of banks offering asset loans that are focused regionally versus globally. Your aircraft broker will be able to provide you with a list of financial institutions which will provide a good starting point.
The key to acquiring financing is to do a wide search, look regionally and worldwide, ask lots of questions when you discuss with them, and start discussing lending as soon as you start your search for your private jet. The entire financing process can take a minimum of 4-8 weeks to structure, get credit approvals, and organize the paperwork needed, so the sooner you start on the process, the sooner you can purchase the jet you want.
Articles are written from real world experience by Colibri Aircraft’s individuals. If you have any questions or comments about the topic of this blog, please feel free to contact us at enquiries@colibriaircraft.com
