Aircraft Loans
Flying is one of the ultimate expressions of absolute freedom and is a growing passion for many. Nevertheless, for many years the opportunity to own a plane was limited to a select few. Today, thanks in part to developments in technology and the growing ability to borrow money for such a purchase, this divide is starting to narrow. In fact, at Aircraft Banking Centers our focus is entirely on helping people fulfill their dreams and purchase their very own planes.
The First Step: Securing Aircraft Loans
Before strapping yourself into your cockpit for takeoff, it's important to be well grounded and take a serious look at available aircraft loans. Like any large purchase, this process can be frustrating if you do not choose wisely. To that end, we at Aircraft Banking Centers have made every effort to simplify the process, offering our clients unparalleled flexibility from the moment they contact us until their application is completed and approved.
One of the primary ways we are able to streamline our aircraft loans comes from our internal underwriting capabilities. Not only will we work with you to find the lowest rates, but our credit officers will make sure that your entire experience is both fast and worry-free. As opposed to banks or other loan companies that deal with a variety of purchases, we deal exclusively with aircraft. Our expertise in the field is another one of the reasons we are able to provide superior service and results to our customers.
Beyond securing the best aircraft loans, we are also dedicated to providing a variety of additional helpful services. From insurance providers to avionics shops, engine facilities to incorporation aids, our website lists a myriad of links to the top providers in the nation. Our experts are always willing to answer any questions and can even pre-qualify you directly over the phone.
How Banks Determine Aircraft Value in Today's Market
One of the best recent quotes regarding the state of the industry was from the publisher of V-Ref, Fletcher Aldredge who stated "Anything that happened prior to October 1, 2008 is ancient history and has no bearing on present day". Lenders are now looking more closely at market trends, recent sales, and the age of aircraft. In some cases, it's nearly impossible to finance older, less mainstream aircraft, i.e. Merlins, MU-2's, Twin Commanders, etc. As a general rule, turbine aircraft manufactured prior to 1975 are considered dinosaurs by most banks and aircraft older than 20 years generally require much larger down payments, and shorter terms. With so many banks exiting the market, those remaining are less willing to take the same credit risks they did in the past and are not "giving" interest rates away due to loan losses, diminished portfolio values, and repossessions. David Madden, Executive Vice President of Aircraft Banking Centers, Inc. states "There still is plenty of money available to well qualified applicants but the aircraft as collateral, is being heavily scrutinized by underwriters and is now a much more important and significant piece of the entire credit package". Values are still determined by using the industry price guides, subscription internet multiple listing services, and independent appraisals but banks are starting to discount values even more based on the likelihood of continued deflationary forces. Another great quote from an unknown source is "Logic does not apply to bankers". Be prepared to produce thorough financial statements, complete tax returns, and verification of cash and liquidity. The banks love to see you have cash these days and recent bank and brokerage statements are a huge underwriting "plus" when supplied with credit applications!
The Professional Lenders Association (PALA.Aero) is a leading industry group comprised of established aircraft finance companies and professional loan brokers who specialize in getting aircraft transactions approved and closed. Please visit the PALA web site and select one of several dedicated aviation loan professionals to assist you in your aircraft financing needs.
New Financial Association Vows to Assure More Competitive Financing for Aircraft Purchasers
(Atlanta, GA - November 7, 2008) Today, forward thinking aircraft lenders across the nation formed the Professional Aircraft Lenders Association (PALA), announced Dave Madden, President of Aircraft Banking Centers, Inc., and founding director of PALA.
The chief function of PALA is to help assure aircraft lending alternatives to consumers during this particularly difficult economic period when lending is restricted. PALA Members are not banks but are independent aircraft finance resource companies that arrange finance products for consumers in the market for general aviation piston and turbine, fixed wing aircraft and helicopters for personal or corporate use. Collectively, PALA Members account for nearly 50% of all general aviation aircraft loans generated annually thereby giving PALA a powerful voice with lending institutions. Additionally PALA Associate Bank Members that provide aircraft finance are FDIC-insured.
"PALA Members are a seasoned group of aircraft finance professionals," stated Madden. "Each PALA member has between 10 to 35 years experience. Collectively PALA accounts for approximately $250,000,000 in aircraft loans each year. As you can imagine, PALA members have very strong relationships with banks, and our volume of business gives PALA the ability to negotiate the most favorable financing rates and terms in the industry."
"Due to the current economic conditions, many banks have increased down payment requirements, shortened amortization periods, or gotten entirely out of aircraft finance," stated Wally Zook, Chairman of Wally Zook and Associates Aircraft Finance Corp. and a founding PALA director. "PALA selected several top-ranked FDIC-insured banks that are not suffering the current liquidity problems as Associate Bank Members. Thus, we can assure ongoing credit access for qualified individuals in the market for new and pre-owned aircraft," Zook said. PALA Members have nurtured financial resources over decades so individuals or small companies seeking aircraft financing need only make a single phone call to any PALA Member for convenient access to the best rates and customer service available rather spending days trying to find a bank that will accommodate their financial needs.
Mitch Loiselle, President of Freedom Aero Credit and a founding PALA director, added, "Our association [PALA] is made up of seasoned lenders in the industry, who are also pilots and have more than 10 years of experience in the business - most have more than 25 years of experience." Loiselle said, "PALA has established strict member guidelines and an ethics code, which will be enforced by our Board. We can assure clients that they will receive unequalled service by professional and knowledgeable lenders and set a new standard in the industry for customer service in aircraft finance."
Aircraft purchasers are encouraged to visit PALA.aero to select a PALA Member to assist them with their complete purchase and finance process. Banks interested in PALA membership are invited to contact PALA at (770) 320-8467 or info@pala.aero for more information.
