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Q&A with Pilatus: Part 3QA with Pilatus Part 3

A sit down with Ronald Smith, Regional Director for Pilatus Aircraft Sales

Thinking about moving up to the turboprop market and unsure of what to expect in the buying process?  In Part 3 of this 3-part Q & A Series, Ronald Smith, Regional Director for Pilatus Aircraft Sales, and AOPA Finance President Adam Meredith discuss the financial side of purchasing a turboprop and tips on financing with a partner. 
AOPA Aviation Finance

In your experience what do your buyers say is the most important when choosing a financial partner- Rate? Term? Structure? 
In my experience, rate is the most asked about, followed by down payment amount.

Buyers are telling us that used inventory is very thin, especially PC12 buyers. Can you confirm this? And if so, what advice would you give buyers?
Yes, I can confirm this. The industry marker for a ‘Seller’s market’ is 10% or more of an aircraft’s fleet being available for sale. Currently, there is less than 5% of the total US fleet of PC-12s for sale. This lack of inventory is common for the PC-12 market as Pilatus adheres to small batch production. Given the favorable conditions for tax sheltering provided by the new tax code, I would anticipate inventory numbers to contract further as budget review season begins and mitigating tax liabilities prior to year-end become a reality for many potential aircraft buyers. My advice to buyers who are looking to purchase, and are motivated by available tax write-offs, is not to wait until the 11th hour as you may run out of time to close prior to January 1st or you may find yourself in the position of purchasing an aircraft this was not your first (or second or third) choice simply because of the constraints of needing to get the airplane into service prior to year-end. If there is less urgency in your purchasing needs then be patient, wait for the airplane that feels right to you, do a thorough pre-purchase inspection and feel good about your decision. 

We are frequently assisting partnerships with financing. How frequently do you see this and what advice do you have for partners?
I’m experiencing partnerships one to two times a year. Typically the partnership are people who are already familiar with each other and likely have previously owned an aircraft together so the partnership is already structured. If two individuals are trying to purchase an aircraft as a partnership for the first time, they should consider engaging an aviation attorney for counsel in properly structuring the partnership. 

Do you have any questions for me? 

RONALD: I have a question about timing. Often great importance is placed on the ability to close on an aircraft quickly whether to meet contractual obligations or so an aircraft can be placed into service in time for tax considerations. Are there any suggestions you might have for Buyer or Seller to help with a timely closing and can you tell us about AAF’s (AOPA Aviation Finance) timing capabilities?

ADAM: The best counsel is to turn over/delegate responsibilities to trusted professionals. 1. Ensure there’s an escrow agent managing the closing 2. Empower your CPA, CFO or a tax matters employee to provide any additional financial documents and to be the keeper of the final checklist needed to close 3. Have your A&P ready to provide details about the aircraft (logs, pictures etc..) and coordinate scheduling an appraisal (if needed). This should ensure a timely close. Obviously, to ensure timely approval, I’d encourage folks to start the financing process as soon as you know you’re going to purchase something. 

Is there anything else you’d like to tell us?
Now that customer deliveries of the PC-24 have begun, I look forward to having a similar conversation with you about transitioning from a turboprop to a twin-engine business jet that has back-country capabilities! 

Considering aircraft ownership? AOPA Aviation Finance will make your purchase experience as smooth as possible. For information about aircraft financing, please visit the website (www.aopafinance.com) or call 1-800-62-PLANE (75263). 

Click here for Q&A with Pilatus: Part 2

Adam Meredith

Adam Meredith

President of AOPA Aviation Finance Company
Adam Meredith, President of AOPA Aviation Finance Company, is an aircraft finance professional with more than 15 years lending, small business management and customer service experience. Adam is a commercial pilot with multi-engine and instrument ratings.

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