Flying On Credit - 0 views

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  #1 Roscoe Macias on 30 Jan 12

   

  Are you trying to buy a plane, heli-copter or glider? If so, odds are you're either soaking in cash or do not have nearly sufficient. If it is the latter, never fear: You might be able to borrow the money.
  
  Aircraft loans are financing arrangements, just like home or car loans, that permit people and businesses to purchase and use aircraft. Given the very high cost of the majority of aircraft, airplane loans are very common in the world of air travel, both commercial and private.
  
  Many aircraft loans are relatively simple while others are more complex. At the simple end are loans for private and business aircraft; at the complex end are the loans commercial airlines use to buy their aircraft fleets. The simplest loans are those used for corporate and private aircraft; the more complex are used by commercial airlines to purchase and maintain their fleets. The simple schemes appear like auto loans and home mortgages, while the more complicated plans look like maritime and project financing.
  
  Here's a look at how it works when you use a loan to buy a private or corporate aircraft. First, you allow the lender (presumably a bank or aircraft financial institution) basic information about yourself and the airplane you desire to purchase. The lender takes the next step, evaluating the value of the plane and conducting a search of the aircraft's title to guarantee it is owned free and clear. A security arrangement is then prepared, providing the lender a security interest in the airplane, along with a promissory note which holds you personally responsible for the remainder of the loan in case repossession of the aircraft doesn't cover the entire balance. A surety, similar to a co-signor, might be needed if you have questionable credit. If you've shaky credit, the lender may also need a surety, just like a co-signor.
  
  This easy loan plan is sufficient for those purchasing private and corporate aircraft, that are relatively inexpensive compared to larger aircraft. Big commercial jets, alternatively, are extremely costly. Last year, Boeing pegged value of its 747 jets at $333 million; although airlines don't normally pay the full sticker price, the final cost is still high.
  
  Airlines use 3 common financing ways to pay for their fleets: direct lending, operating leasing and finance leasing. Cash payments, tax leases and manufacturer assistance are alternative options.
  
  Direct lending is just like the traditional aircraft loans given to private owners, only on a much larger scale. In this case, several banks sometimes contribute to one airline's loan. Here, as with private aircraft loans, lenders normally demand a security interest in the aircraft therefore they may repossess it if the loans go unpaid.
  
  Operating leasing, unlike direct lending, does not grant ownership to the aircraft's users. In this type of aircraft loan, airlines lease their aircraft from Commercial Aircraft Sales and Leasing organizations, businesses that lease used aircraft and equipment to airlines. These leases are usually short-term, no more than ten years, and they're most attractive to small airlines and start up ventures because costs are decreased and the airlines do not need to hold onto the aircraft beyond its usefulness.
  The 3rd kind of aircraft loan used by airlines, called finance leasing, is basically a more complicated type of operating leasing. Using debt and equity financing, third parties (partnerships or special purpose companies) purchase aircraft and lease them to airlines. Sometimes the airline has automatic ownership, or the option to buy, when the lease expires.
  
  Aircraft Loans

   

  <div class="cArrow"> </div><div class="cContentInner">Are you trying to buy a plane, heli-copter or glider? If so, odds are you're either soaking in cash or do not have nearly sufficient. If it is the latter, never fear: You might be able to borrow the money.<br /><br />Aircraft loans are financing arrangements, just like home or car loans, that permit people and businesses to purchase and use aircraft. Given the very high cost of the majority of aircraft, airplane loans are very common in the world of air travel, both commercial and private.<br /><br />Many aircraft loans are relatively simple while others are more complex. At the simple end are loans for private and business aircraft; at the complex end are the loans commercial airlines use to buy their aircraft fleets. The simplest loans are those used for corporate and private aircraft; the more complex are used by commercial airlines to purchase and maintain their fleets. The simple schemes appear like auto loans and home mortgages, while the more complicated plans look like maritime and project financing.<br /><br />Here's a look at how it works when you use a loan to buy a private or corporate aircraft. First, you allow the lender (presumably a bank or aircraft financial institution) basic information about yourself and the airplane you desire to purchase. The lender takes the next step, evaluating the value of the plane and conducting a search of the aircraft's title to guarantee it is owned free and clear. A security arrangement is then prepared, providing the lender a security interest in the airplane, along with a promissory note which holds you personally responsible for the remainder of the loan in case repossession of the aircraft doesn't cover the entire balance. A surety, similar to a co-signor, might be needed if you have questionable credit. If you've shaky credit, the lender may also need a surety, just like a co-signor.<br /><br />This easy loan plan is sufficient for those purchasing private and corporate aircraft, that are relatively inexpensive compared to larger aircraft. Big commercial jets, alternatively, are extremely costly. Last year, Boeing pegged value of its 747 jets at $333 million; although airlines don't normally pay the full sticker price, the final cost is still high.<br /><br />Airlines use 3 common financing ways to pay for their fleets: direct lending, operating leasing and finance leasing. Cash payments, tax leases and manufacturer assistance are alternative options.<br /><br />Direct lending is just like the traditional aircraft loans given to private owners, only on a much larger scale. In this case, several banks sometimes contribute to one airline's loan. Here, as with private aircraft loans, lenders normally demand a security interest in the aircraft therefore they may repossess it if the loans go unpaid.<br /><br />Operating leasing, unlike direct lending, does not grant ownership to the aircraft's users. In this type of aircraft loan, airlines lease their aircraft from Commercial Aircraft Sales and Leasing organizations, businesses that lease used aircraft and equipment to airlines. These leases are usually short-term, no more than ten years, and they're most attractive to small airlines and start up ventures because costs are decreased and the airlines do not need to hold onto the aircraft beyond its usefulness.<br />The 3rd kind of aircraft loan used by airlines, called finance leasing, is basically a more complicated type of operating leasing. Using debt and equity financing, third parties (partnerships or special purpose companies) purchase aircraft and lease them to airlines. Sometimes the airline has automatic ownership, or the option to buy, when the lease expires.<br /><br /><a rel="nofollow" href="http://avionfinance.com">Aircraft Loans</a></div>

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