First, the speed, complexity and capacity of turbine-powered aircraft compared to piston-powered aircraft is unmatched. Second, the complexity and cost of the acquisition and insurance process can be shocking. Most people are familiar with the first, but some are surprised by the second.
This is especially true if the buyer is used to buying all his piston planes with a large down payment and documents in excellent condition. More than one of our customers has bought a Cirrus SR22 first and then got into the Vision Jet. Same company, so same loan procedure, yes? No.
There are significant differences between acquiring a $250,000 loan and a $2 million loan, and what determines these differences comes down to the policy and authority of the lender. In other words, beyond a certain monetary threshold, the number of people taking a critical look at your loan file increases.
Each lender has different policies regarding loan approvals. Some require the credit officer to lead the process, while others simply require a credit analyst. Some loans may need to be submitted to the credit committee. Others have to go all the way to the board of directors.
Typically, smaller lenders will have lower thresholds, in which case larger dollar loans are increased for additional approvals. At the end of the line ? More eyeballs mean more time to process the loan.
And if you’re approaching the over $3 million range and haven’t spoken to your insurance broker yet, prepare to be amazed. Once you hit that $2 or $3 million threshold, things—like the plane—get more complicated. Around the $3 million mark, unfortunately, things start to get complicated. Our advice? Ask about insurance early in the buying process to avoid any surprises.
Very good advice. Excellent rates. Helpful and responsive representatives you can trust. Three good reasons to turn to AOPA Aviation Finance when purchasing or refinancing an aircraft. If you need a reliable source of financing with people who are on your side, just call 800.62.PLANE (800.627.5263) or click here to request a quote.