Buying New vs. Buying Used
Every pilot, at some point, grapples with a significant question: Should I invest in the latest model of an airplane or opt for a used one?
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Business jet owners and potential buyers may face certain challenges when financing an aircraft. Any errors or oversights during this process could complicate the funding process, so it’s important to know the most common mistakes and how to avoid them.
This article will give you three essential aircraft loan tips and aircraft financing strategies to help you successfully navigate your aviation finance journey.
The most common mistake in aircraft financing is outdated financials. When applying for a loan, make sure your business finances are up-to-date. You will need to provide recent Profit and Loss and Balance Sheet statements, previous year-end financial statements, and up to three years of tax returns. Depending on your business structure, you may require additional documents like articles of incorporation or an operating agreement to allow a full view of your financial situation.
Additionally, you should supply Ultimate Beneficial Owner (UBO) and credit information for a thorough credit review process. Preparing any relevant financial information is important to avoid delays or pitfalls throughout the financial process.
Another common error when financing an aircraft is not providing accurate and detailed information to potential lenders. This should include details about the aircraft, such as its make, model, and serial number. While the tail number is helpful, you will also need to provide the serial number to verify the aircraft’s history. A thorough pre-buy inspection can confirm this. Having digitized logbooks can expedite the process, as logbook review often takes some time.
It’s also crucial to provide information about the intended use and ownership structure. Many clients use an “airplane LLC” to own their business aircraft. Consult an aviation tax consultant or an aviation attorney on how to set this up for your business.
Speak with an aviation finance professional today to get your real rate on your next aircraft purchase!
When buying a business aircraft, it’s crucial to form your transaction team early on. This team typically includes an aircraft broker, insurance specialist, aviation attorneys, finance company, and escrow company. Waiting until the last minute to involve a finance partner can cause unnecessary delays. Engaging with a finance partner early can help prevent complications, especially for fast-paced acquisitions or transactions.
Understanding how to avoid financing errors for business jets can enhance the likelihood of securing funding and guarantee a more seamless experience. Providing precise and thorough information, steering clear of inaccuracies and last-minute alterations, and involving a finance partner early on are crucial for achieving optimal results. At FLYING Finance, we communicate with business jet buyers daily, ensuring successful and effortless transactions.
Every pilot, at some point, grapples with a significant question: Should I invest in the latest model of an airplane or opt for a used one?
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At Flying Finance, we’re your trusted partner in aviation financing. With a deep understanding of the aviation industry and a commitment to making your dreams take flight, we provide tailored financing solutions for business jets, piston aircraft, turboprop aircraft, helicopters and more. A financier who understands aviation.
605 Chestnut Street, Ste 800, Chattanooga, TN 37402