Aircraft Financing

One of the most challenging parts of purchasing an aircraft can be arranging financing. Whether you are buying a new aircraft or refinancing an existing one, Austin Bank can help you achieve your objectives with credit solutions to help make your aircraft investment a success.

Whatever your particular circumstances are, financing can be structured with interest rate alternatives, competitive down payments, and effective amortization schedules. We have the resources to offer financing solutions designed to meet your needs.

A completed aircraft financing application package will include the documents listed below:

  • Personal financial statement  (use our form or your own)
  • 2 years federal tax returns including schedules, W-2s and K-1s (3 years required for loans $1 million +)
  • Current paystubs covering the last 30 days
  • Aircraft specifications
aircraft

 

Frequently Asked Questions

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Are the rates and terms different depending on the type of aircraft?

The rate and terms of financing may vary depending on the type and use of the aircraft. Rate and terms for a piston aircraft may be different than that of a turbine aircraft. In addition, for an aircraft with more hours, there is usually more wear and tear and a faster devaluation of the aircraft. For that reason, the loan is structured to more closely align itself with its market value, typically by a combination of a higher down payment and shorter term. This way, when you decide to sell or upgrade the aircraft, you aren't upside down (owe more money than it's worth).

Do you need my entire tax return?

Yes. We collect complete tax returns including schedules, statements, K-1s and W-2s for both personal and business returns. We do this in order to get a complete financial picture - specifically adding back any sort of non-cash losses or other earnings that do not report on the bottom line. It also helps us understand your financial situation better and alleviate some of the back and forth questions we may have otherwise.

What if I have had a Bankruptcy?

If you have EVER had a bankruptcy for any reason, please list this on your application. If we find out there was a bankruptcy that is not disclosed, this will negatively affect your submission. We may be able to consider applicants that have past bankruptcies, but need to understand the background with the bankruptcy filing, need to see a re-established credit history (excellent credit) since that time, and typically like to see a minimum of 7 years since the bankruptcy discharge.

How do I apply with partners?

We are happy to finance partnerships of up to 4 individuals. As a partnership, you will need to agree on how you will register the aircraft and all partners will need to be available to sign closing documents. Unless applicants are spouses with joint tax returns, we will need a complete and separate application package from each partner in the group. Please allow a little extra time for the underwriting depending on the number of partners.

Why do we need to go through an Escrow closing when purchasing an aircraft?

An escrow closing is becoming standard in the aviation industry similar to home mortgage closings. In order to ensure accurate title transfer without any risk to your asset, an aviation title and escrow company is required to facilitate the transaction. This protects all parties, including you as the buyer, the seller and the lender.

What is the International Registry ("IR") and do I need to worry about registering?

The IR was established in 2006 as a result of The Cape Town Treaty and International Registry of Mobile Assets ("Cape Town Treaty"). The IR has replaced FAA filing as priority in perfecting interests in ownership, etc. for particular assets (generally for larger aircraft). If you are a buyer, seller, or anyone who has an interest in the Aircraft Object you qualify for IR filing. The IR is not concerned with how you use your aircraft - domestic or international - but what type of Aircraft you own. IR registration is completed via the internet and your title company can perform IR functions on your behalf making IR transactions much easier for you.

Aircraft Objects Eligible for IR Recording meet one or more of the following:

  • Airframes that are type certificated to transport:
    • At least 8 persons including crew; or
    • Goods in excess of 6050 pounds
  • Helicopters that are type certificated to transport:
    • At least 5 persons including crew; or
    • Goods in excess of 990 pounds
  • Jet propulsion aircraft engines with at least 1750 pounds of thrust or its equivalent.
  • Turbine-powered or Piston-powered aircraft engines with at least 550 rated take-off horsepower or its equivalent.

To see if your aircraft is IR eligible click here and select the link "Cape Town Eligible Aircraft".

Does Austin Bank take care of the registration details with the FAA?

We work with the aviation escrow and title company to ensure accurate recordation of your purchase. We will not fund until we have been advised that there is clear title and you are assured of the ability to immediately file a complete registration at the FAA.

Does Austin Bank share my information?

 

 

Helpful Info:

Completed aircraft financing application packages may be returned to any Austin Bank location.


Financial Statement

If you do not have a current Financial Statement, click here for a form to help you prepare one.


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