The Questions You Need To Ask Before Financing An Aircraft

Kent S. Jackson | November 15, 2016
After careful consideration, you have found the jet that fits your business and lifestyle goals. Competitive terms and rock bottom interest rates have once again made aircraft financing an attractive option.  Before making the decision to engage in or forgo financing, consider the following questions and discuss them with a trusted advisor.

To Finance or Not to Finance – Six Questions to Consider

  1. Which financial institution is best positioned to finance the new aircraft – your hometown bank or a mainstream financial institution? When you purchase a home, you shop the financing. Do the same with your new aircraft.
  2. Is the aviation industry anticipating any regulations that will affect the financing in the years ahead? Asking an attorney or CPA experienced in corporate aviation is a good idea.
  3. Will the financing institutions work with you (the borrower) to navigate or overcome unforeseen or unexpected circumstances?
  4. If the market declines, which financial institutions are more inclined to search for reasons to place the borrower into default?
  5. If your financial needs change, can the associated finance documents prohibit certain uses of the aircraft?
  6. What costs and finance charges are contained within the loan documents? Once again, comparing loan offers will help you get the best deal.
Because each aircraft serves a unique purpose and the ownership structure will vary, there isn’t a universal answer to any of the above questions. With that said, once you compare your options, you’ll be in a much better position to decide what is right for you. Discussing various financial scenarios will make the transaction and financing process easier to navigate.

For a more comprehensive overview of the aircraft financing and to ensure compliance with the FAA and IRS, consult with a reputable attorney experienced in corporate aviation.  Contact jetlaw.com.

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