Question: My 1967 Mooney sat idle in a hangar for over a decade. There is pitting on the cam and a full overhaul is recommended. At the same time, the legacy avionics will get upgraded to GPS Nav, Xpdr w/ADSB Out, ADSB-In, ADAHRS, Engine Monitor, 406-ELT, and PFD. There will also be some maintenance items: mainly IRAN of the landing gear. Is AOPA working with a single lender or will the application be shared with more than one lender?
Answer: We do have multiple lenders to consider for aircraft financing, but all our lenders use the aircraft as collateral so there isn’t an option to finance part of the airplane with one lender and another part with a different lender. Most lenders will consider financing for avionics upgrades and engine overhauls, but none will finance maintenance and repairs. The airplane having sat for so long will likely limit the number of lenders we would be able to consider, as many require the aircraft to be within annual and airworthy at the time of financing.
The lending options we would be able to consider would be limited to financing a maximum of 80% to 85% of the aircraft’s post-upgrade value, or value added by the upgrades, whichever is less. In most cases, lenders can finance up to 85% of the actual unit cost for avionics. The remaining 15% of the cost, plus labor and any other ancillary costs associated with the work cannot be financed. The engine overhaul will add a fixed value to the airplane based on the average overhaul cost for that engine. Up to 85% of this value could be considered for financing.
At the time of financing, the lender would disburse the available funds to an escrow account until the funds are required by the shops. Any costs not included in the financing will be paid first, and the lender will typically settle up with the shop once the work is completed. Please give us a call at 800.627.5263, we would be happy to discuss your situation in more detail.
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