Financing Portions of a Kit Aircraft

Adam Answers

Adam answers in March's edition.

Question: I would like to finance the engine and instrument package for my RV-12. Approximately fifty thousand dollars.

Answer: We have a couple different options for building kit aircraft. Lenders have no issues with financing portions of the build, such as the engine or instrumentation. Typically, this type of financing has shorter terms and higher interest rates. Once the aircraft is complete and airworthy, lenders can refinance into a traditional aircraft loan with lower rates and longer terms.

Question: Does your financing company take care of registration deals with the FAA?

Answer: AOPA Aviation Finance does not handle the FAA filing in-house. Most lenders prefer the use of a third party escrow company based in Oklahoma City to handle the transaction.The escrow company will not only handle the transfer of funds between the bank and seller, but will also file all the necessary documentation including the Bill of Sale, Registration Application, and lender's security agreement at the time of closing. AOPA is strategic partners with Aero-Space Reports. They are our preferred escrow company and they offer discounts to AOPA members, just let them know you are a member. 

Question: How do I apply with partners?

Answer: Most lenders are OK with working with two to four partners. In general, partners help the cash flow; they make the financial situation look better. One important consideration, though, in the underwriting process is that it will take longer per the number of people involved. As a very general rule of thumb, two partners will take twice as long; three partners will take three times as long, and so on. When you contact us for a quote, let your regional account executive know that you plan to apply with partners and who those partners will be.  They will then communicate with each partner to make sure they are informed about the process. Each partner will be required to provide a complete application package. On each individual application, you can note the names of the other partners as co-applicants so our staff can package the applications together for the lender.

Have questions for Adam? He is happy to answer them. Submit your questions here.

Great rates. Great terms. Helpful and responsive reps. Three good reasons to turn to AOPA Aviation Finance when you are buying an airplane. If you need a dependable source of financing with people who are on your side, just call 800.62.PLANE (75263) or click here to request a quote.

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Adam Meredith

Adam Meredith

President of AOPA Aviation Finance Company
Adam Meredith, the longtime president of AOPA Aviation Finance Co., died after a long battle with cancer in December 2023. He is remembered for his passion for helping fellow pilots, leading a team devoted to putting flight training and aircraft ownership within everyone’s reach.

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