1. Individuals with complicated financials. Aviation lenders must be able to clearly see the sources and timing of cash flow to understand a borrower’s debt service side of the equation in a typical credit-based loan. Having revenue streams from multiple assets often doesn’t provide such a clear understanding. A person possessing multiple assets, i.e. businesses generating revenue, might find asset-based loans a good choice.
For example, individuals with real estate holdings usually hold them in multiple entities, complicating matters from a lender’s viewpoint. Car dealers are another example. Regardless of how well-established or profitable a car dealer is in real life, the nature of that business generally has them highly leveraged. On paper, to a bank they look like they’re carrying a lot of debt. Both examples tend to make a lot of banks hesitant to issue credit-based loans.
Last of all, asset-based loans can be done generally more quickly because lenders won’t require a full financial audit. Their concerns center around whether you’ve sued or been sued by anybody, if you have a prison record, or if you have other anomalies that might surface.
Great advice. Great rates. From helpful and responsive reps you can trust. Three good reasons to turn to AOPA Aviation Finance when you are buying or refinancing an airplane. If you need a dependable source of financing with people who are on your side, just call 800.62.PLANE (800.627.5263), or click here to request a quote.