4 Myths Surrounding the Aircraft Financing

4 Myths Surrounding the Aircraft Financing

The myths circulating around about aircraft financing discourage many prospects to pursue their purchase. Therefore, it is important to clear out all the misconceptions to encourage businesses to carry out the dream acquisition of the desired aircraft. Following are some of the prevailing myths that have no truth to them.

There Are Fewer options for Financing

No doubt, with today’s condition the playing field is a bit smaller. However, there is still numerous credible financing provider available like Air Fleet Capital to help businesses buy new or used aircraft. There are a variety of options available for financing including banks and financial institutes that supports the businesses of regional markets.

Now, the businesses looking for aircraft assets like piston or turboprop may just need the help of a local bank for the financing. However, if the business is looking for newer or bigger jets, it’s better to take the help of knowledgeable lender who specializes in high-end business deals.

Cash is the Best Option

The first decision for airplane financing is to decide whether to carry out the purchase through cash or credit. The businesses that decide to pay cash have various benefits including no down payment, credit check, or interest payments. However, when it’s time to sell the aircraft, it can create complications. All-in-all, the decision of cash or credit depends on the individual businesses. If the loan payment is more than the fund’s investment value then borrowing the loan is not a good idea, and cash is a better choice. By contrast, when the funds can earn remaining in investments, the loan payment is better.

In conclusion, cash is not the only best option. The situation varies with each business.

You Cannot Negotiate the Terms with Financing Source

When the financial source quotes the rate, they do it by analyzing the situation of the business. Therefore, you can negotiate the terms about the interest rate or installments. Remember, if you are willing to pay more amount as a down payment, the better it will be for your business aircraft financing. It lowers down the risk for lenders, hence they will be willing to decrease the interest rate. However, if the business puts a small amount of down payment, then this rate will be skyrocketed.

More so, the decision depends on the borrower, whatever terms suit them best. So, try to negotiate the deal and be wise in doing so.

A Borrower Doesn’t Have To Worry About Title Search

Not all lenders carry out the title search before closing out the loan. If there is an issue, later on, it will be harder to sell the aircraft. Plus, the lender will still have you on the hook for the loan balance. Therefore, all the purchases should have a thorough title search before the closing of any deal. In comparison to the problems that occur later, this method is quick and inexpensive.