Finance Options

[WingsofRoffa]

Morning all,

When I last explored the topic around 18 months ago there was a well established financing option available for budding pilots to be (without £120,000 lying about). This doesn't seem to be available anymore? The name of the scheme escapes me... was it a spanish bank?

What are the options now?

[gordonquinn]

That's probably BBVA you are thinking of, although it still needed security. There are plenty secured loan options out there although don't know if they would be keen on lending for pilot training, I suppose that was probably a BBVA product USP.
I think there is an organisation called Pegasus Finance who might offer something.

[WingsofRoffa]

Thank you! And how does the 69k "L3 security bond payment" work? As it's a bond, is it paid back to you over X years?

[ollie135]

Morning, I don`t mean to come across as harsh but here goes. If youre like me and can`t afford 120k from savings/family then you`re in luck because a choice has been made for you- Modular. Work at the same time as doing your ppl/hour building/atpl exams etc (several scholarships etc are floating around) then if you must, get a loan for the Cpl me ir before completing the mcc from savings. This should keep your total loan to around 25-30k which is far more manageable than 120k. Or find another bank with eye watering interest rates and enjoy being broke for the next 15years.

To answer your question I think you mean BBVA.

[ManUtd1999]

Thank you! And how does the 69k "L3 security bond payment" work? As it's a bond, is it paid back to you over X years?
It's complicated but I'll try and explain as far as I understand it.

Scenario A:
If you get a job with an airline directly (eg, Ryanair, Jet2) without being "placed" via the L3 holdpool, then the airline probably won't take on your bond. The 69k will never been seen again and you will join airline X on whatever terms they offer.

Scenario B:
If you join one of L3's partner airlines (eg, Easyjet) then the bond will be transferred to that airline. It is then normally "repaid" to you in the form of a tax advantage over 7 years. For example, if the normal cadet starting salary is 40k, you will be paid 28k + 12k tax free bond repayment. So you do not gain a net 12k, you gain whatever tax saving you make as a result (~4k with standard UK tax). This is of course dependent on continued employment with your first airline and the arrangement continuing to be ok with the tax authorities. It does not apply for all L3 cadets. For example,AFAIK Easyjet cadets based abroad do not get this, they are paid the full cadet salary instead with no bond repayment.

The only example I'm aware of where the 12k is repaid fully on top of salary was the old BA FPP scheme, but this no longer exists.

In summary, you will not be earn back a net gain of 69k but you might get some (substantial) tax savings. That isn't what I'd call "repayment" but L3 continue to call it that. As I say, I'm not 100% sure of the current state of play maybe someone else can add more.

[Chris4]

The only example I'm aware of where the 12k is repaid fully on top of salary was the old BA FPP scheme, but this no longer exists.

I think even with the BA FPP scheme you would join on a reduced salary from standard which was then made back up to a standard salary with the bond repayment