How Much Down Payment Do You Need for an Aircraft?

One of the first questions buyers ask is, "How much of a down payment do I need for an aircraft loan?" While the exact amount can vary, the industry standard is typically 15% to 20% of the aircraft's purchase price.

The Industry Standard: 15%

For most standard, certified aircraft (like a modern Cessna, Piper, Cirrus, or Beechcraft) and a borrower with a strong financial profile, a 15% down payment is the benchmark. This means for a $500,000 aircraft, you should be prepared to put down at least $75,000.

When Might You Need a Larger Down Payment?

Some situations may require a larger down payment of 20% or even 25%. These include:

• Older Aircraft: For aircraft older than 20-30 years, lenders may require more equity to offset the higher perceived risk.
• Complex Aircraft: Turbine aircraft, jets, or helicopters may require a larger down payment.
• Unique Models: Financing for experimental or less common aircraft almost always requires a higher down payment.
• Weaker Credit Profile: A borrower with a lower credit score or higher debt-to-income ratio may be asked to contribute more cash to the deal.

The Benefits of a Larger Down Payment

While 15% may be the minimum, providing a larger down payment has significant advantages. It lowers the loan-to-value (LTV) ratio, which reduces the lender's risk. This can result in a lower interest rate and a lower monthly payment. It also means you have more equity in your aircraft from day one.

Can You Finance with 0% Down?

Unlike the auto industry, 100% financing (or a zero-down loan) is virtually nonexistent in aircraft financing. Lenders require buyers to have a significant financial stake in the asset from the beginning.