2012 Year-end Aircraft Financing

25 Days left in 2012 for customers to buy an aircraft and cash in on the great tax incentives and historically low interest rates this year!  Financing is still readily available for you December buyers out there!2012

As we gear up for a big year-end rush, we know many of you are purchasing before the clock strikes midnight on 2012.  If you are interested in financing that purchase, please see the important dates and recommended deadlines below to ensure a smooth closing before December 31st:

December 14:
Last day for complete credit application submissions for loans above $1 Million to arrange financing before year-end
December 21: Last day for complete credit application submissions for loans below $1 Million to arrange financing before year-end
*Please note: applications can still be submitted/closed after these dates, but meeting year-end goals may be in jeopardy.

December 25: Christmas Day (Closed)
December 31:  New Year’s Eve
(please note many employees at the FAA and Banks leave early both Christmas Eve and New Year’s Eve, making it more difficult to handle a high volume of late closings these days)

Plan ahead as weather can impact the best-laid plans.  Oklahoma City has been known to get weather this time of year, shutting down the FAA and Title Companies.

Since December is the busiest time of year for many of us (including dealers, banks, title companies and the FAA), response and action can become more sluggish the closer it gets to 12/31.  Getting approved asap and working out the details in advance ensures a smoother transaction.  If you are still deciding between a few different options, get pre-approved for a finance amount today, then finalize your plans with the funds in your back pocket.

Don’t hesitate to contact us and get started today at 800.390.4324 as we quickly approach our suggested application deadlines above.  We look forward to hearing from you and helping you ring in 2013 with your new bird!

Whew! AirVenture (aka Oshkosh) 2011 Wrap-Up

The passion of Aviation was in the air at AirVenture Oshkosh 2011, and there was a sense of renewed excitement  throughout the show grounds.  With mixed weather – lots of humidity that followed our Virginia crew, and a mini dust-storm that followed the Phoenix crew – the heat was constant, but it didn’t discourage the crowds who turned out in great numbers – higher than the previous year!  The Friday event day alone had overflow parking lots crammed with fans trying to get their eyes on the new Boeing 787.

From a business perspective, activity was excellent.  Many of the attendees came through Hangar A (where AirFleet called home for the week) and wanted to talk financing for a purchase in the near future, or discuss options for refinance of their current aircraft.  It was encouraging to talk with attendees that stopped by about their plans to move forward and some have already secured financing through us after the show.  Further proof of eager buyers in attendance came in the form of manufacturers, from Piper to Flight Design, reporting multiple orders at the show.  Hopefully, the activity we saw in Oshkosh is a precursor to a continued rebound through the second half of the year.

But enough about business, AirVenture is a place for the aviation enthusiast to immerse themselves in what they love – forgetting about everything else for 7 days (or more, for those brave campers that set up house at Camp Scholler in the beginning of July).  From “FiFi” (the B-29) to the Boeing 787 Dreamliner’s debut; old and new aircraft were all on display, and the record crowds were eager to take it all in.   EAA also uses AirVenture as a platform to salute those that have used the power of aviation to defend our freedom, with a special tribute to 100 years of Naval Aviation this year.   There were other events throughout the week saluting Bob Hoover for his many achievements, or at forums with Chuck Yeager as he detailed his experiences as an Air Force Test pilot.   Along with these events, there were rows upon rows of Warbirds, experimental aircraft, and newly manufactured aircraft on the grounds.  For those camping out, there were plenty of evening events such as the night air show and the Theatre in the Woods showcasing aviation cinema and concerts.

We couldn’t possibly include all there is to see at AirVenture in this blog, but if you love anything aviation, there is something new for everyone to experience each year.  In case you missed it, please visit our Facebook page to see pictures of some of the highlights at this year’s show taken by our staff and friends!

We hope to see you at next year at AirVenture 2012 – the World’s Greatest Aviation Celebration!

AirVenture 2011 Kick-off!

It’s already that time of year again!  Summer starts flying by and despite the seemingly long countdown that begins at Sun ‘N Fun each year, AirVenture Oshkosh always sneaks up on us.  Every summer in Oshkosh, Wisconsin, aviation enthusiasts descend upon the week’s busiest airport in the world for a pilot’s most exciting 7 days of the year.  For those of us working the show, it’s always a mix of work hard/play hard, which makes for an exhausting, but memorable show!

EAA’s 2011 lineup is sure to be one of the most memorable, with the arrival of the Boeing 787, a special focus on celebrating 100 years of Naval Aviation throughout the week, the 2nd annual night airshow, and other old and new events that help AirVenture live up to it’s motto as the “World’s Greatest Aviation Celebration”!

If you will be heading to Oshkosh, please stop by and visit us!  AirFleet Capital will be on-hand to discuss any financing questions you may have.  With great values on aircraft and the ability to fix historically low rates for up to 20 years… it is a great time to think about purchasing, upgrading, or refinancing!  Our Financing Booth is located in Hangar A, Booth 1143.   Safe travels to OSH – we look forward to seeing you there!

For more information on EAA AirVenture 2011, visit: www.airventure.org

Aircraft Financing at Sun N Fun Kick-off!

It’s that time of year again, time for a little aviation Fun in the Sun; the 37th annual Sun ‘n Fun Fly-in starts Tuesday, March 29th in Lakeland, FL.   Thousands of aviation enthusiasts, aircraft manufacturers and vendors will arrive at “Spring Break for Pilots” to show off their wares and participate in the camaraderie of aviation.  We are looking forward to the chance to get out and meet with customers and dealers, while enjoying a welcome morale boost for our industry!

To many, including us, Sun ‘n Fun is the first large general aviation trade show of the year, and eyes are on the event to gauge the industry activity and mood of those in the thick of aviation.  As exhibitors and attendees, we are eager to knock the dust off after a long winter (and a few years), with hopes that more positive economic news transfers into increasing sales.

The 2011 event is sure to be memorable. The F22 Raptor is returning, and tributes are planned for the 20th anniversary of Desert Storm, the 10th anniversary of September 11, and a performance by the Blue Angels to celebrate the 100th anniversary of Naval Aviation.  In terms of General Aviation excitement; Cessna will be unveiling their “Next Generation” Corvalis, an update of the model they purchased from Columbia, and Piper will be launching a new Private Pilot training program – “Ready, Set, Fly”.  We look forward to these and other exciting manufacturer announcements.

Of course, the highlight in our mind will be the excellent selection of aircraft and services available on-site to support aircraft buyers.  AirFleet will have a full staffing throughout the event, with loan specialists on-site to discuss our current fixed and variable rate financing programs from single-engine piston aircraft, to helicopters and business jets.  Recent underlying interest rate decreases have reflected favorably on the rates we are able to offer for aircraft financing.  For those able to benefit from the year long tax incentives, ready to trade up, or refinance their current aircraft, now is a great time to lock in these lower fixed rates – we don’t know how long this will last!

If you are attending Sun ‘n Fun, please stop by and see us (Hangar D, Booth #23) – we’d love to catch up or providing you with financing rates and terms for your upcoming purchase or refinance!

Questions Aircraft Loan Underwriters Ask – Aircraft Information (Part 5 of 5)

As part of securing an aircraft loan, an underwriter will need to review the following: 1.) Credit Application, 2.) Credit Report, 3.) Cash Flows, 4.) Net Worth, and 5.) the Aircraft information itself.

As a part of an educational series, we are addressing each of these components separately and reviewing some of the questions the lender tries to answer through analysis of a client’s credit package.  This should provide some insight into what a loan officer is trying to accomplish by requesting certain information.

In this article, we’ll discuss aircraft information and how that affects underwriting and loan programs:

1. Why do we need a spec sheet? In order to finalize a financing approval, an aircraft needs to book out (based on current market value as represented in Bluebook or VRef software).  We will use the spec sheet as a means of gathering all of the necessary information and making our book value as accurate as possible.  Year/make/model, engine and airframe times, dates of upgrades, and damage history should all be recorded so that we may accurately reflect these in the final value.

2. How does type of aircraft affect financing? AirFleet Capital offers financing programs for various types of aircraft – jet, turboprop, piston, sport, helicopter and experimental.  Due to the unique nature of each category, terms will vary for each one.  Standard terms are available on most jet, turboprop and piston certified aircraft (15% down for 20 years) since they have a history of market acceptance.  Sport aircraft are slightly more restricted (higher down payment and shorter term) since it is a new market comparatively and banks are still getting comfortable with market acceptance and resale values.  Experimental aircraft are the most restricted as there is no valuation guide.  Helicopters are a different beast altogether and generally require 20% down for terms to 10 years (sometimes longer).

3.  How does age of aircraft affect financing? In general, the older the aircraft, the shorter the financing term.  Depending on the type of aircraft, the age limit will vary.  Piston aircraft 1975 or newer, terms are 20 years; older than 1975, terms are 15 years.  Turbine/Turboprop aircraft have tighter guidelines – generally 1980 or newer for turboprops and 1985 or newer for turbine aircraft.  Also, aircraft with over 10,000 hours will limit the program options we have.

4.  How does price/value affect financing? In general, as the loan amount increases, the rate decreases.  In addition, you will often find that the lower the loan-to-value (loan amount relative to the book value aka LTV), the better the rate – often with the lowest rates at 70% LTV or better. Lenders are also interested in the aircraft value to ensure they aren’t financing more than a percentage of fair market value.

5.  How does aircraft utilization affect financing? As the utilization of an aircraft increases (leaseback or commercial use), the depreciation of the value of the aircraft is accelerated.  The increased wear and tear of a higher utilization environment coupled with the increased engine and airframe time will accelerate the depreciation, particularly when compared to aircraft of similar make and model in a traditional utilization profile (private use).  In order to offset the effect this will have on the value, financing terms are set to protect both the customer and the lender by tailoring the down payment, term and rate to utilization.  As annual utilization increases, the loan programs will require higher down payments and shorter terms.

Helicopter Financing in Today’s Market

We attended the  Helicopter Association International (HAI)  HeliExpo in Houston last week, and found a dynamic and healthy level of energy in an aviation niche that hasn’t missed much of a beat since the economic downturn.  From what we saw, the show  was well-attended from the standpoint of both exhibitor and customer participation.  However, in speaking with dozens of manufacturers and sales professionals, there was a common theme – “Helicopter customers are in need of financing options.”

With the credit crunch over the past 18 months, the hardest hit may have been the helicopter market.  While funds were always readily available for fixed -wing purchases, the number of institutions financing helicopter purchases has seemingly dwindled.  Unlike fixed-wing aircraft, helicopters are a newer asset class for most underwriters.  It has just been within roughly the past 5 years that loan programs have been available and mainstream for helicopter financing. When things started  to tighten, the lesser-known or lesser-understood niches were the first to get constricted.

That being said, AirFleet Capital  has the capability, appetite and desire to support financing for the helicopter market.  Though older (pre-1995) and commercial-use helicopters  present a challenge and require unique structuring, there are  exceptional financing options available for late-model, private-use  helicopter  buyers.  Outside of normal financing considerations like liquidity, credit score, and cash flows, a few factors including type of helicopter and utilization will affect the finance terms offered.

Please call us for financing details on your particular purchase.