Type Matters

When it comes to aircraft financing deals, type matters. According to AOPA Aviation Finance President Adam Meredith, it boils down to risk. Is the bank taking a chance by financing your pur­chase?The same things that might make a potential owner nervous make banks nervous, as well.  

Aircraft types with a long service history, abundant support, and a big trading market are all easy deals-the Cessna 172 or Piper Cherokee, for example. Go with a more unique airplane, and the deal may take extra work, or the lender may offer different terms, Meredith said. “A thinly traded market usually isn’t good.”  With that in mind, banks look at how many aircraft are active on the registry, and what the market looks like.  A strong market could overcome low numbers. There aren’t that many Cessna 185s remaining, for example, but the demand remains strong.  So a bank won’t be overexposed.

Meredith said the complexity of systems, number of engines, and even years since certification can play a factor. “Just think of how much it would cost the bank if they have to take it back,” he said. “And you have a good idea of the way the financing will go.”

There are options, however. More money down and a shorter term may be offered. And you can get representatives of AOPA Aviation Finance on your side. Meredith said his team will reach out to lenders and sell them on these tougher transactions. “We love a challenge,” he said.