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What Are My Options for Receiving an Equity Loan?

Adam Answers

Adam answers in May's edition. 
Reshoot for the AOPA Livermore regional event, including the winemaking region, local personalities, food, downtown and an air to air photoshoot over downtown San Francisco of a Pitts S2.

Question: I live in Missouri and purchased an RV6A as a result of an insurance settlement in 2016. Do I owe sales tax on this new purchase? In addition, do I owe tax on formation of a LLC where I joined with another current owner of an airplane (172N)?

Answer: Sales tax and other taxes surrounding aircraft purchases vary by state and by where the aircraft purchase takes place. Your CPA is the best resource for determining what taxes you may owe. Additionally, AOPA’s Legal Service Plan offers the ability to speak with aviation attorneys. They can pair you with an attorney with aviation tax experience. 

Question: I’d like to look into options for receiving an equity loan against my Pitts S2B. The funds would be partially used for improvements to the aircraft, but in part used for cash flow and safety reasons. I’m having a difficult time finding information about what my options are and what I need to do. Could you provide any insight?

Answer: Upgrade and improvement loans are treated just like a refinance. Lenders will ask for shop estimates of the work to be performed in order to determine the final value and available loan amount. Generally lenders will finance up to 85% of the upgraded value or the cost of the upgrades, whichever is less. Funds will be disbursed directly to the shop once the work is complete. In some instances partial funds can be disbursed up front if the shop requires substantial deposits to start the work.

Unlike home loans, most aircraft lenders do not offer additional equity financing if the funds are not going into improving the aircraft. Those that do require the borrower have strong cash flow and liquid reserves. The funds cannot be used to support struggling cash flow, failing businesses, etc. Maximum financing would be limited to 50% loan to value.   Please call us at 800.627.5263 if you would like to discuss further.

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.


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.
Topics: AOPA Aviation Finance Co, AOPA Products and Services, Ownership

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