Can you give any detail?
I’ve been in business since 1978 and it was always about security.
Yes you are right, all banking is about the bank feeling happy with the prospect of the loan being repaid as agreed, they clearly want both the interest and the principal.
What I mean is that whereas at one time there was an approach based on ability to pay, these days it seems to be more formulaic, and loan to value ratios are required to be much lower in the last 3 or 4 years than was the case for the previous 20.
We have had deals fall through because our customer cannot jump through all the hoops to get his finance,
Peter, no. That is apparently available sometimes in the US. No-one in Europe will do that. It is a pretty risky approach when the owner is responsible for maintenance etc.
Can you borrow money to buy a plane without signing a personal guarantee i.e. the loan is secured purely on the asset?
If so, the minimum deposit has to be pretty generous – maybe 50% for a 5 year loan for a new plane.
@muelli WeFly as a concept is quite attractive. Only reason why I have not done anything yet with them is the fact that they only had DA-40 with open shares to offer. Certainly they have also found a way to finance an N reg aircraft, because theirs are on the FAA register.
Thanks to all who have provided pointers. I will get in touch with those mentioned.
As someone who is very involved in lending I can assure you that they will look at both the asset, the loan to value and also the creditworthiness of the owner. This is lending with recourse to the borrower. Yes they are secured but they mostly want to be sure they won’t need to sell the plane.
Banking these days is all about loan to value ratios
Can you give any detail?
I’ve been in business since 1978 and it was always about security.
Banking these days is all about loan to value ratios
I am sure there is no problem whatever getting a loan to buy an aircraft, or 1000 tons of snake oil.
There is just one question the bank will ask: the security, Sir?
Does that mean that all N registered aircraft in Europe have been purchased in cash or people have taken a mortgage on their house to buy their airplane?
Cash. Don’t know anybody who’re lending money for it.
As I wrote earlier Close Brothers finance aircraft on N, M, or European registers.
Does that mean that all N registered aircraft in Europe have been purchased in cash or people have taken a mortgage on their house to buy their airplane?
Cash. Don’t know anybody who’re lending money for it.
Did you ever talk with the guys from WeFly? They arrange to buy shares of an Aircraft.
