Many aircraft owners were shocked by economic events of 2008 and 2009.
Not only were aircraft owners’ personal finances rocked but due to some “dump and run” tactics by banks and unprepared aircraft owners, values of many aircraft declined by up to 40 percent almost overnight.
At the same time, a number of banks and financial institutions withdrew from aviation lending to concentrate on other troubled loans, especially real estate. Some aircraft owners may have received communications from their lenders that additional amortization was required on their loan or that a balloon payment would not be refinanced.
The decreased availability of easy aircraft financing resulted in many potential buyers seeking other financing sources including home equity, business loans, and cash to fund aircraft purchases. In 2008 approximately 80 percent of aircraft purchases were financed, compared to just 20 percent currently.
Fortunately, the market is recovering and banks are loosening up requirements on aircraft loans and reintroducing financing products. If you have been discouraged in the past couple years with options available for an aircraft purchase, it may benefit you to contact your lending institution to find out what options you have in the current market conditions.
To help members make sense of these changing market conditions, the AOPA Aviation Finance Company, LLC was formed in early 2013. AOPA Aviation Finance sought out lenders who were committed to aviation finance, who had attractive rates and terms, and who knew how to service AOPA member needs. This newly formed syndicate of lenders is ready to assist AOPA members. Interest rates have dropped and values of many aircraft have stabilized, so now may be the right time for aircraft owners to consider refinancing or changing aircraft.
AOPA Aviation Finance has a staff of knowledgeable specialist to help find solutions for your lending needs and answer all your aviation financing questions. Fill out a quick form online and get the process started or you can call 800/62-PLANE (75263) to determine which loan works best for you.