The COVID-19 pandemic spawned a lot of self-reflection, so it’s not unusual that we’re fielding the question of, “When is the best time to finance an aircraft, before or after I start my own business or make a major purchase, like an RV or a real property?”
While every lender wants a full picture of your finances, most are narrowly focused on your cash flow. With that in mind, AOPA Aviation Finance counsels it’s best to buy the airplane before any other major purchase or life move that might jeopardize consistent cash flow.
That means securing aircraft financing before one leaving that lucrative 9-5 to found the next viral sensation. Unless that startup is generating immediate cash flow sufficient to cover all your current and airplane-induced debt plus 60%, that new trillion-dollar can’t miss is just an additional, higher hurdle you must now clear before an aircraft financer will approve your loan.
Same with home purchases or refinancing. One recent client wanted to accomplish two things this year, first--buy an airplane, and second--refinance his house. The refinance was going to lower his monthly but double the loan time. He thought doubling the loan time might look like a liability to the aircraft lender.
It’s not. Because lenders are more focused on cash-flow than term, a reduced monthly mortgage is a net positive. A lower payment presents a rosier financial picture.
We had another recent borrower who was approaching the end of his auto lease. We talked and he revealed that a buyout which included financing the car would reduce his car note, again improving how he looked to the aircraft lender.
The bottom line? It’s all about managing the order of purchases to put you in the best financial light.
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.