Private Aircraft Finance

[charlie-india-mike]

Question???

What is the best way to fund an aircraft purchase?

Aviation Mortgage?
Personal loan?
Re-Mortgage property?
Spend Kids inheratance?
Spend Savings?

Any views on this topic?


Thanks

C-I-M

[Keef]

I was told "if you need to ask, don't do it."

I paid cash. I was working for a living in those days.

[Genghis the Engineer]

Well my three were respectively...

- Saved up (most difficult!)

- Ill-gotten gains from helping C4 put the Scrapheap Challenge flying machines episode together (particularly appropriate I thought).

- Personal loan, told the bank it was for an aeroplane, they decided that was too complicated and just gave me a car loan with a footnote in the paperwork.

G

[Hairyplane]

Give Lombard a call - they have a specialist aircraft finance division. THey are very helpful indeed.

Ordinarily, they will lend you 70% of the hull value, depending on type - understandably there are some they don't like and some they really do!

Whay isn't widely understood about finance is that you can structure the repayments in many ways.

One way is to arrange for the final payment - usually the 60th payment - to be a biggy, or, in finance parlance - a 'balloon payment'.

This keeps the payments down.

You can also refinance the balloon if you want.

What it does do is put a brand new aircraft within the reach of more buyers.

There are many advantages in buying new. This is what I did in Jan 01. My expectation is to sell in 06 and buy another new machine.

(I am more likely to do this if the law changes on transferring registrations. My OOS reg. is bang on for my business - I really would like to keep it.)

I hope this helps.

HP

[Vedeneyev]

I recently spoke to Lombard about financing an aircraft purchase and their proposal was quite frankly bonkers.

They offer finance of up to 80% of the a/c cost ex vat in the form of an aircraft mortgage. I wanted to take finance on 60%. Their terms were Libor+400 (approx 7.5% apr) no matter what the duration of the loan was.

I pointed out i could mortgage 95% of a property at 4.45% apr
I could take out an unsecured personal loan at 6.60% apr (From Lombard Direct themselves!!)
I could buy the aircraft on my credit card for 7.30% apr

I got no reply. Maybe I'm missing something, but why give lien over 100% of your aircraft when you can source funding cheaper without having to give away that option?! Has anyone taken out finance with Lombard? How can they make money if they're so uncompetitive?

[foghorn]

Lombard are NatWest, who along with BT and BG are on my blacklist of companies I refuse to deal with due to shoddy service and poor products.

Therefore it doesn't surprise me!

LIBOR + 400 on an asset that depreciates as slowly as an aircraft is a joke. You can get car loans cheaper than that and they on average lose 66% of their value in 3 years!!!

[Whipping Boy's SATCO]

Met a chap the other day who financed an RV6 after his wife ran off with the Boss. Apparantly it was the best decision she ever made!