Question: I own a 2012 Cirrus SR20 GTS (G3 Perspective) and it is in activity as a flight school aircraft at a Cirrus training center. I bought it in December 2020 for $300,000 with 30% down ($175,000 left on loan). It is getting close to 2,000 hrs so I am planning for the engine overhaul. I have an estimate for $82,000 (New Continental engine + install). Over the past year and a half I had a new parachute installed, new Air Conditioning and 6-year Propeller / Governor overhaul. Are there financing options available? I went back to the bank that financed it and the only thing they offered was to refinance the whole aircraft at a rate above 8% (I am now at 4.99%). When I asked if they knew someone who would finance engine overhaul, they told me they did not and that "if there were to be a second lien on the aircraft, it would trigger default on my note/security agreement". Please let me know your thoughts on this. If not possible, I will pay cash for it but if there is an option to finance, I will consider. Thanks!
Answer: The lenders we work with are able to finance engine overhauls. That being said, aircraft lenders will use the aircraft itself as collateral for the loan, so any financing currently in place would need to be refinanced into a new loan to include the overhaul. Any new financing would be subject to today’s rates and terms.
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