What You Need To Do Before You Get a Loan For Your Airplane
You have your pilot’s license and now you want to purchase your airplane. Whether you are buying for yourself or your business, this can be an expensive venture. There are many items that you need to think about before you approach the bank for a loan. Here are a few steps to consider as you finance your first aircraft.
Pick Out Which Airplane You Want
Think about why you want this airplane and what your purpose for it is. Consider how many people or materials you intend to transport and how often these trips will be. Once you have this information, take a look at the market to see what is available to you. You will want to consult a financial advisor before you make a final selection. They will be able to advise you about what models will be the best investment for you and will be easier to get a loan for. Keep in mind that the newer the aircraft, the most likely it is that you will be approved for lending. The bank will want to know that they will be able to sell it if they have to reclaim it from you.
Decide Who Will Be the Primary Owner
Financial institutions can be particular about who they work with when it comes to airplane loans. You will want to speak to an expert in this field to determine what you need to do to get the cash for your purchase. If you are buying this for your company, you will have a better chance of applying as yourself instead of under your business name. The lending organization will also need to know who will be flying the aircraft, what you will use it for, and if there will be any chance you will be liable for something. They will want copies of your financial records as well as your current credit rating.
Determine Which Financing Works Best For You
As you shop for your airplane, decide which method you want to take to obtain it. If you choose a lease, your payments will be lower. However, the ownership will belong to the company you are working with instead of you. A loan gives you sole control of the aircraft and what happens to it. You can also use it as depreciation on your taxes if you are a corporate entity. However, the amount you will have to pay each month will be higher.