Entrepreneurs operating successful import-export companies might want to acquire their own exclusive private business jet. This mode of transport enables them to travel to overseas destinations at ease to finalize lucrative business contracts. However, aviation manufacturers making such aircraft often charge exorbitant prices for their products. The entrepreneurs normally have to pay a substantial sum of money up front to acquire the business jets for their choice. This type of capital expenditure can have an adverse effect on their business’ finances, especially the cash flow position. Alternately, they can opt to apply for an aircraft loan to finance their business jet acquisition.
Financing business jet acquisition using aircraft loans
Most entrepreneurs assume financing a business jet acquisition with an aircraft loan a complex process. They need to understand that business jet acquisition deals can exceed millions of dollars. The commercial banks offering this lending scheme will insist they go through a series of elaborate procedures. Only then will the officials of these financial institutions in charge of sanctioning loans accept their applications. Generally, the financiers will expect the entrepreneurs to satisfy the following stringent eligibility criteria before sanctioning their aircraft loans:
- They need to have an exceptionally high credit score which should exceed 700,
- Provide a down payment equivalent to 20% of the amount they quote in their loan application, and
- Should be financially solvent to pay off 18 monthly repayments in liquid assets.
Entrepreneurs should first visit a prominent aviation manufacturer and select the private business jet they wish to acquire. Then, they should proceed to hold discussions with this manufacturer to arrive at a mutually acceptable price. They should only visit a reliable commercial bank willing to offer them aircraft loans at competitive interest rates. This financier might insist on appointing an expert to conduct a pre-approval inspection of the new business jet. Upon receiving the specialist’s assessment report, the lender will ask the entrepreneur to submit the necessary documents.
Arranging the necessary paperwork to apply for an aircraft loan
Entrepreneurs need to submit the following documents at the time of approaching a reliable commercial bank for an aircraft loan:
- Certified copies of the Certificate of Incorporation describing the nature of commercial activities.
- Copies of their companies’ Federal tax returns for the previous two assessment years which a qualified Certified Public Accountant attests,
- Copies of their personal Federal tax returns for the last two assessment years which a qualified CPA certifies and attests,
- Copies of the companies’ certified audited annual financial statements of their companies for a specific number of years,
- Copies of their companies’ latest bank statements, and
- Copies of their companies’ current certified audited financial statements and federal tax returns.
Applying for aircraft loans is an ideal way for entrepreneurs to finance their private business jet acquisition deals. However, they should be careful when choosing the right commercial bank to approach the loan. This corporate lender they choose should have a good standing market reputation and experience in dealing in such lending schemes. Moreover, this financier should be willing to offer a wide range of options at competitive interest rates with other favorable terms.
