Private Jet Financing: How to Secure Your Loan

Financing a private jet—whether it's a light jet like a Citation M2 or a mid-size jet like a Phenom 300—is the premier tier of aircraft finance. The process is highly specialized, with lenders placing intense focus on the borrower's financial strength, the aircraft's value, and its intended use.

How Jet Financing Differs from Other Loans

While the basic steps are similar, jet financing involves a higher level of scrutiny:

• Focus on Financial Strength: Lenders require significant liquidity and net worth. They will perform a deep analysis of global cash flow for individuals and corporate balance sheets for businesses.
• Asset and Use Case: The specific make, model, age, and condition of the jet are critical. Lenders also want to understand how the jet will be operated (Part 91 vs. Part 135) as it affects the risk profile.
• Complex Documentation: The required documentation is more extensive, often involving detailed operational budgets, maintenance projections, and multi-year financial statements.

Asset-Based vs. Credit-Based Lending

Most jet financing falls into two categories:

• Credit-Based: For borrowers with exceptional financial strength, the lender may base the loan primarily on their creditworthiness, with the jet as collateral.
• Asset-Based: More common for older jets or more complex ownership structures. Here, the loan is heavily secured by the value of the aircraft itself, which may lead to higher rates or lower LTVs.

Common Structures for Jet Loans

Jet loans are rarely one-size-fits-all. They are often customized to the buyer's needs. Common structures include 5, 7, or 10-year terms with 15 to 25-year amortizations. Both fixed and floating interest rates are available, and we can help you negotiate the best structure for your financial goals, whether you're acquiring a new Citation, Phenom, or Gulfstream.