Aviation Finance?

[Guest SAJabiruflyer]

I asked my wife about this Tomo (she's a former banker. Former because she now works for me. Well at work anyway. At home she's the boss). She tells me everytime you do something significant financially - like apply for a credit card, store card, loan - it will appear on your Credit file (she had another name for it, but meh, I fix computers not loans). So the point is - dont apply for finance unless you have done much research that strongly indicates you will be accepted. She even suggest befriending a good broker and taking em for a fly :) . A good broker will look at all the options available, and with good contacts in the industry they've built up, they'll make phone calls to discuss your case "off the record" to ensure the best chance of success before submitting any application that is then entered onto your credit file. Something as simple as a Credit Card can affect your chances - for example when applying for my house loan, it did not matter that I paid off my credit card in full every month before accruing interest, what mattered was the high credit limit (I use it for business, gotta love those reward points). But anyway, find a good broker, talk to friends and family about any brokers they've used. And above all, fly safe :)

 

 

[naremman]

Tomo, you have not indicated what type of aircraft of aircraft that you were considering, or what role or expectation you would have of it.

 

Given that aircraft in both RAA and VH can come into contention for you, the possibilities open up.

 

Had an interesting chat with my LAME at Northam Air Services, and a significant amount of their work involves mantaining station aircraft in the North West. He stated that a nember of station owners had looked for alternatives to the C150/172 workhorses. A number of possibilities had been tried, but he was seeing a trend back to the old Cessnas.

 

His opinion was that it was a buyers market for the old Cessnas, and some very good buys were available were in the $30-50K range. The Cont 0/200A and 0/300s were mostly reliable units that usaully made overhaul times, and he could generally do a 100 hourly in quick time.

 

When it comes to aviation related matters I generally advise any aspirant to empty everthing out of their wallet, and then take a good look at it. Then get used to this being normal!!

 

 

[johnm]

Tomo

 

Our loan organisation stated that all finance compoanies are reluctant to loan against anyhing that 'floats, farts ot flies'

 

IF you can get past that criteria - by some other positive - then that's good

 

To me the advice regarding taxation is good advice - if you can derive an income from the plane (toolbox in the back and a D12 engine block in the front) then that wil also help ?

 

jm

 

 

[Tex]

If you are paying it off fast then home loan is the best option IMHO.

 

If you are not living beyond your means, you lack imagination!

 

 

[jetjr]

Mention "aircraft" and all the rates go up, many wont even touch them. As advised, try to roll it into your home loan.

 

A simple question to your banker is to see how much equity you have in the loan and thats how much you can extend it. Nothing formal just a question and they can get answer straight off their screen.

 

Another issue is often in RAA we really arent borrowing enough money. $30K-$80K doesnt excite equipment finance people (if the aircraft bit hasnt frightened them off already). You could be looking at high setup fees ~$500 then up to 10% interest

 

The financiers are really interested in how they get their money back if you stop paying and houses are easier to sell than aircraft.

 

 

[damono]

Perhaps purchase the aircraft as a joint owner or a shareholder to cut down the cost... we all love to fly but with kids, jobs, etc. you can't be up there all the time. I'm not saying that it would work for everyone, and it may not for you, but in the right circumstances could be another option. If pursuing this path then get a lawyer involved to draw up the paperwork, might cost around 0.5% of the purchase price but that would be worth the peace of mind. Good luck and let the forum know how it all goes!