Why Lenders Are So Concerned About Jet Age While Being More Flexible With Pistons – Aviation Finance

So potential buyers are setting their sights on older jets, some of which may be two-and-a-half to three decades old since they were manufactured. Lenders, however, tend to have an aversion to these “vintage” aircraft. Why the dichotomy?

For a prospective owner/operator, the old jet is a perfect fit for the mission. For a lender, the jet is old, complex and pressurized turbine equipment, whose systems may be one or more generations out of date. While the buyer may see an eclectic mix of older and “classic” avionics and be up for the challenge of using them, the lender sees an avionics suite that needs a full replacement upgrade just to be marketable. For them, the added maintenance expense associated with older systems, as well as avionics upgrades, increases the risk that if a fault occurs, they will need to spend money selling an asset. Meanwhile, the jet will only decrease in value over the life of the loan. This is why older jets tend to go unfunded.

That’s not to say deals involving 25- or 30-year-old jets can’t be done. If the jet is designed for single-pilot operations and is still in production, lenders are more inclined. Additionally, finance companies will seriously consider jets that are no longer in production if the manufacturer is still in business and also offers an ongoing support program for that particular airframe. Respective examples include the Embraer Phenom 100 and the Cessna CJ range.

Our eternal advice is to find the jet for your mission rather than finding a jet for itself. A Falcon 900 might be admirable, but a slightly smaller, newer jet that performs the same mission profile might make more sense. A newer aircraft almost always expands financing options, both in terms of cost of money and its resale value.

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.

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