Finding Money To Buy That Jet Getting Harder

October 8, 2008
Aviation Financing

Business aircraft buyers can expect loans to be harder to find and more costly, according to Adam Warner, president of Key Equipment Finance, Downers Grove, Ill. “There are fewer players in the finance market because some banks simply don’t have capital to lend,” he said.

Those that have money are more selective and now less willing to finance 100 percent of an aircraft’s value. “Used aircraft prices are declining, so many banks will advance only 90 percent of the value.

And interest rates are higher, too, “about 100 basis points [1 percent] higher than just three or four months ago and 200 basis points higher than at this time last year. Buyers should look for a well-capitalized lender and be prepared “to put some skin in the game.

More money won’t become available until investors feel more comfortable with the economy, he said.

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