An aircraft acquisition loan is a secured loan used to buy an aircraft, with the aircraft itself as collateral. You own the aircraft from day one, make fixed or floating payments over the term, and keep any value it holds when you sell.
Who is it a good fit for?
- The aircraft will stay core to the operation for years
- Utilization is steady and predictable
- You can put cash down without starving operations
- You want to build equity and control maintenance decisions
When might another structure be better?
- Demand for the aircraft is still unproven
- Cash is better spent on staff, marketing or other aircraft
- You expect to replace the aircraft within a few years
How an aircraft loan works
The lender appraises the aircraft, reviews the borrower and the operation, and lends a share of the value. The loan is secured by a lien recorded with the FAA Aircraft Registry and, for many aircraft, an interest registered with the International Registry under the Cape Town Convention. You make payments over the term. Some loans amortize fully; others leave a balloon payment at the end to lower the monthly payment.
What lenders look at
For operators, lenders look past personal credit to the business: financial statements, how many hours the aircraft will fly, how it earns revenue, the operator certificate and safety record, and the aircraft itself. Aircraft age, total time, engine time since overhaul, damage history and logbook completeness all affect the advance rate and term.
Balloons and terms
A balloon lowers the monthly payment by leaving part of the balance due at the end. It works when you expect the aircraft to hold value and plan to sell or refinance. It adds risk if values fall or utilization is higher than planned, because high-time aircraft are worth less.
Aircraft Loan Calculator
Monthly payment, total interest and balloon, with a balance chart.
