{"id":11047,"date":"2023-05-02T10:31:23","date_gmt":"2023-05-02T10:31:23","guid":{"rendered":"https:\/\/helitrader.com\/?p=11047"},"modified":"2023-06-08T19:05:50","modified_gmt":"2023-06-08T19:05:50","slug":"what-to-know-about-financing-your-first-aircraft","status":"publish","type":"post","link":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/","title":{"rendered":"What to know about financing your first aircraft"},"content":{"rendered":"

Financing an aircraft is in some ways like purchasing a house, and in other ways like buying a car \u2014 but different than both in its complexity. It involves a number of up-front decisions based on the purchaser\u2019s usage of the aircraft and tax preferences. It also requires several specialized steps along the way, including detailed proof of your financial position, a considerable down payment, and several legal steps required for aircraft.

The good news is there are experts in the area of aircraft financing to help guide you and even oversee your financing needs from beginning to end. Someone new to aircraft purchase will certainly have the best chance to both ensure everything runs smoothly and get the best deal if they partner with one of these experts \u2014 be they an independent aviation financing broker or a bank working with aviation financing experts who oversee the process and work with you.

Jarrod Burton is the senior vice president of Echo Aviation Leasing Corporation in Montreal, Quebec. He works with a variety of clients from private owners to helicopter operators with large fleets. HeliTrader sat down with him to discuss the high-level aspects of what is involved in securing helicopter financing.

Burton emphasized that buyers put themselves in the best position when they consider their financing options and abilities well in advance of a helicopter purchase. This includes setting a budget and determining how they will account for taxes.<\/p>

\"\"
It\u2019s recommended that first-time helicopter buyers work with an aviation financing company or bank with specific aviation experience to ensure a smooth and successful transaction.<\/figcaption><\/figure>


\u201cThere are basically two types of financing: lease financing and a loan,\u201d said Burton. \u201cLease financing is like leasing a car; after the term you can purchase the aircraft. A loan is like it sounds, a straight loan. With lease financing you write off the lease payments, where with a loan you depreciate the aircraft and write off the interest payment. There is a lot more to it and it can get very complicated, so I recommend buyers talk with their accountants and determine the best route based off their needs and long-term goals with the aircraft.\u201d

When it comes to securing a loan for your helicopter, Burton highly recommends buyers \u2014 especially first-time buyers \u2014 work with a financing company or bank with specific aviation experience and be talking with those aviation experts from the beginning.

\u201cStep number one is finding the right partner and making sure you’re talking to the right people that speak the language that can help you,\u201d noted Burton. \u201cIf you try to get the deal done with a personal banker or commercial account manager who doesn’t understand aviation, they’re going to struggle getting it done, and you’re going to get frustrated because they’re not able to put the deal together properly \u2014 or will take a very long time doing it.\u201d

From there, Burton says the next step is putting together an underwriting package that gives the financier all the information needed to analyze the value of the aircraft and your ability to pay the loan. Most institutions will require three years of financial statements, either corporate tax returns or personal tax returns, and business financial statements or a personal net worth statement \u2014 depending on if the aircraft is being purchased by a company or an individual, Burton said. It is not uncommon for a financial institution to want to see a year to 18 months\u2019 worth of loan payments in liquid assets as well.

Additionally, if an aircraft is already chosen, information on the aircraft should be in the package, including the pre-purchase inspection report, aircraft spec sheet, life component sheets, and a letter of intent to purchase or the signed purchase agreement. However, Burton warns, do not have an aircraft appraisal done until the lender is on board, as that lender will want a hand in the appraisal.

Pulling all of this information together early will save a lot of time, eliminating the back and forth of the institution asking for more information, added Burton.

When meeting with the financier, in addition to supplying the underwriting package, be prepared to provide direction on the type of financing and structure you\u2019re seeking, including how much money you are prepared to put down and how much per month you are able to pay.

\u201cMost financiers will require 15 to 25 percent down and offer 12 to 15 years of payments for a new aircraft, and eight to 10 for a used aircraft. But there is sometimes room to negotiate,\u201d said Burton. \u201cSome banks are black and white, but others will have some back and forth once the indicative term sheet that outlines the terms is presented. With a company like us, where we help secure financing, it is valuable to know what the buyer can do so we\u2019re not working with financiers who demand more. It is really important to have an open dialogue.\u201d

Burton emphasized that rates are in constant fluctuation, but terms can be negotiated. From his perspective, a 10-year term with 15 to 20 percent down is fairly typical.<\/p>

\"\"
Partnering with aviation financing experts and preparing an underwriting package in advance can help streamline the financing process. Mike Reyno Photo<\/strong><\/figcaption><\/figure>

From there, when terms are agreed upon, the financier will ask for a good faith deposit to begin the extensive underwriting process. Burton advises buyers to be ready to answer a lot of questions during this period of the process. Underwriters could ask for contracts to prove income planned for the aircraft or further details on a high-net-worth individual\u2019s finances.

Once underwriting is done, which can take a couple of weeks, the proposal is submitted to an adjudicator who will either approve, decline, or approve the transaction with modifications. This is where the buyer will make a decision to accept or decline the offer. Burton says the deposit is refundable if the loan is denied, and often refundable when modifications don\u2019t work for the customer. However, if the terms agreed upon prior to underwriting are approved, but the customer walks away, the deposit is often lost.

Once accepted by the customer, an approved loan is then overseen by an aviation attorney who will start documenting the transaction and overseeing aviation-related details such as aircraft registry.

The overall process can take four to six weeks, Burton said, which is why he emphasizes the importance of working with the right people from the beginning to save time and money.

\u201cSome people use an aviation specialist for the whole buying process, and while it can be more expensive, it is a lot quicker,\u201d he said. \u201cI tell people that price and cost are two different things. They may charge more per hour, but they\u2019ll do it in half the time. Lawyers without this competency can often struggle to get the deal across the line.\u201d

Burton also emphasizes that buyers be prepared for closing costs, from the set-up fee for the financial institution to the appraisal and legal closing work. He says it\u2019s not uncommon for these costs to be about one to two percent of the aircraft\u2019s value \u2014 depending on the aircraft\u2019s value. The higher the value of the aircraft, the closer these costs are to one percent of the aircraft value.

In the end, Burton said the two very important things a buyer can do to ensure the smoothest possible financing process are work with a financier with aviation specialists or an aviation focus, and start conversations with those people very early in the process \u2014 even before settling on an aircraft, if possible.

\u201cSome aircraft are hard to finance, others may have restrictions, so I always encourage buyers to pick up the phone and talk to a lender early,\u201d said Burton. \u201cTell them what kind of aircraft you\u2019re looking for and what you\u2019re using it for. They\u2019ll talk you through how it would be financed, or if it could be financed, as well as your ability to qualify for the loan. It doesn\u2019t cost you any money to have those conversations early and get feedback from your lender.\u201d<\/p>","protected":false},"excerpt":{"rendered":"

Financing an aircraft is in some ways like purchasing a house, and in other ways like buying a car \u2014 but different than both in its complexity.<\/p>\n","protected":false},"author":2,"featured_media":11048,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[79],"tags":[],"class_list":["post-11047","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-helicopter","entry"],"acf":[],"yoast_head":"\nWhat to know about financing your first aircraft - HeliTrader<\/title>\n<meta name=\"description\" content=\"Financing an aircraft: Seek expert guidance, consider lease or loan options, work with aviation financing specialists, and prepare financial documentation.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What to know about financing your first aircraft\" \/>\n<meta property=\"og:description\" content=\"Financing an aircraft: Seek expert guidance, consider lease or loan options, work with aviation financing specialists, and prepare financial documentation.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/\" \/>\n<meta property=\"og:site_name\" content=\"HeliTrader\" \/>\n<meta property=\"article:published_time\" content=\"2023-05-02T10:31:23+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-08T19:05:50+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"586\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Heli Trader\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Heli Trader\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/\"},\"author\":{\"name\":\"Heli Trader\",\"@id\":\"https:\/\/helitrader.com\/#\/schema\/person\/79c39f9ef49d0fec2310e7a9bb8ef959\"},\"headline\":\"What to know about financing your first aircraft\",\"datePublished\":\"2023-05-02T10:31:23+00:00\",\"dateModified\":\"2023-06-08T19:05:50+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/\"},\"wordCount\":1359,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/helitrader.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg\",\"articleSection\":[\"Buying a helicopter\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/\",\"url\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/\",\"name\":\"What to know about financing your first aircraft - HeliTrader\",\"isPartOf\":{\"@id\":\"https:\/\/helitrader.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg\",\"datePublished\":\"2023-05-02T10:31:23+00:00\",\"dateModified\":\"2023-06-08T19:05:50+00:00\",\"description\":\"Financing an aircraft: Seek expert guidance, consider lease or loan options, work with aviation financing specialists, and prepare financial documentation.\",\"breadcrumb\":{\"@id\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#primaryimage\",\"url\":\"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg\",\"contentUrl\":\"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg\",\"width\":1920,\"height\":586},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/helitrader.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"What to know about financing your first aircraft\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/helitrader.com\/#website\",\"url\":\"https:\/\/helitrader.com\/\",\"name\":\"HeliTrader\",\"description\":\"A new way to buy, sell and lease helicopters.\",\"publisher\":{\"@id\":\"https:\/\/helitrader.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/helitrader.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/helitrader.com\/#organization\",\"name\":\"HeliTrader\",\"url\":\"https:\/\/helitrader.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/helitrader.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/11\/Helitrader-light-Vertical-Tagline-Logo-dark-5.png\",\"contentUrl\":\"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/11\/Helitrader-light-Vertical-Tagline-Logo-dark-5.png\",\"width\":857,\"height\":211,\"caption\":\"HeliTrader\"},\"image\":{\"@id\":\"https:\/\/helitrader.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/helitrader.com\/#\/schema\/person\/79c39f9ef49d0fec2310e7a9bb8ef959\",\"name\":\"Heli Trader\",\"sameAs\":[\"http:\/\/helitrader.com\"]}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"What to know about financing your first aircraft - HeliTrader","description":"Financing an aircraft: Seek expert guidance, consider lease or loan options, work with aviation financing specialists, and prepare financial documentation.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/","og_locale":"en_US","og_type":"article","og_title":"What to know about financing your first aircraft","og_description":"Financing an aircraft: Seek expert guidance, consider lease or loan options, work with aviation financing specialists, and prepare financial documentation.","og_url":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/","og_site_name":"HeliTrader","article_published_time":"2023-05-02T10:31:23+00:00","article_modified_time":"2023-06-08T19:05:50+00:00","og_image":[{"width":1920,"height":586,"url":"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg","type":"image\/jpeg"}],"author":"Heli Trader","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Heli Trader","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#article","isPartOf":{"@id":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/"},"author":{"name":"Heli Trader","@id":"https:\/\/helitrader.com\/#\/schema\/person\/79c39f9ef49d0fec2310e7a9bb8ef959"},"headline":"What to know about financing your first aircraft","datePublished":"2023-05-02T10:31:23+00:00","dateModified":"2023-06-08T19:05:50+00:00","mainEntityOfPage":{"@id":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/"},"wordCount":1359,"commentCount":0,"publisher":{"@id":"https:\/\/helitrader.com\/#organization"},"image":{"@id":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#primaryimage"},"thumbnailUrl":"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg","articleSection":["Buying a helicopter"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/","url":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/","name":"What to know about financing your first aircraft - HeliTrader","isPartOf":{"@id":"https:\/\/helitrader.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#primaryimage"},"image":{"@id":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#primaryimage"},"thumbnailUrl":"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg","datePublished":"2023-05-02T10:31:23+00:00","dateModified":"2023-06-08T19:05:50+00:00","description":"Financing an aircraft: Seek expert guidance, consider lease or loan options, work with aviation financing specialists, and prepare financial documentation.","breadcrumb":{"@id":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#primaryimage","url":"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg","contentUrl":"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg","width":1920,"height":586},{"@type":"BreadcrumbList","@id":"https:\/\/helitrader.com\/what-to-know-about-financing-your-first-aircraft\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/helitrader.com\/"},{"@type":"ListItem","position":2,"name":"What to know about financing your first aircraft"}]},{"@type":"WebSite","@id":"https:\/\/helitrader.com\/#website","url":"https:\/\/helitrader.com\/","name":"HeliTrader","description":"A new way to buy, sell and lease helicopters.","publisher":{"@id":"https:\/\/helitrader.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/helitrader.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/helitrader.com\/#organization","name":"HeliTrader","url":"https:\/\/helitrader.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/helitrader.com\/#\/schema\/logo\/image\/","url":"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/11\/Helitrader-light-Vertical-Tagline-Logo-dark-5.png","contentUrl":"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/11\/Helitrader-light-Vertical-Tagline-Logo-dark-5.png","width":857,"height":211,"caption":"HeliTrader"},"image":{"@id":"https:\/\/helitrader.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/helitrader.com\/#\/schema\/person\/79c39f9ef49d0fec2310e7a9bb8ef959","name":"Heli Trader","sameAs":["http:\/\/helitrader.com"]}]}},"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/assets.helitrader.com\/wp-content\/uploads\/2023\/05\/Rectangle-132-2.jpg","_links":{"self":[{"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/posts\/11047"}],"collection":[{"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/comments?post=11047"}],"version-history":[{"count":10,"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/posts\/11047\/revisions"}],"predecessor-version":[{"id":11060,"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/posts\/11047\/revisions\/11060"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/media\/11048"}],"wp:attachment":[{"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/media?parent=11047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/categories?post=11047"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/helitrader.com\/wp-json\/wp\/v2\/tags?post=11047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}