San Francisco, CA, January 28, 2013 --(PR.com
)-- Commercial and corporate aircraft finance is a different ball game from the financing of more traditional transport and assets, such as real estate and vehicles. Whether you're starting or running an aircraft business or need a corporate jet, you have some options for financing your purchase. Bigfly Aircraft Finance, will assist you with any of the following programs.
Secured lending is a common way to finance a commercial or corporate aircraft purchase. Under secured lending, you're getting a loan from a bank to buy the aircraft, just as a private person would do for a smaller aircraft.
The lender checks the credit score of your business and follows its other criteria for commercial loans. Since commercial aircraft is often very expensive, more than one lender may provide the financing to you.
If you're using the secured lending option, the lenders will receive a security interest in the aircraft until the loan is paid off or reaches the balance required for the lender to release the interest. The secured interest allows the lender to repossess the aircraft in the event your business can't make the loan payments.
You may be able to lease a commercial aircraft through the Commercial Aircraft Sales and Leasing Company. One common lease type is the short-term operating leasing agreement. These agreements are usually for a period of less than ten years.
The short duration allows a company to start up more quickly and can help prevent losses if the aircraft becomes outdated. If the aircraft becomes obsolete, your company isn't stuck with it. Aircraft may become obsolete for various reasons, including changes in federal environment and noise laws.
Finance leasing is more long-term than operating leasing. This type of agreement is more suitable if you want your business to own the aircraft eventually but can't afford it or obtain secured financing.
Usually, under finance leasing, a third party buys the aircraft and leases it back to you. You have the option of letting the lease expire at the end of its term, renewing the lease or purchasing the aircraft, depending on your lease terms.
There are different types of finance leasing, including equipment trust certificates, extendible operating leases and U.S. leveraged leases, used by foreign companies that are importing United States aircraft into their countries. The type of lease you'll need depends on various factors, including where your company is located.
You may have other finance options available to you, depending on your company's financial picture and what type of aircraft you want to buy. Larger, newer aircraft is typically more expensive than older models, but prices vary widely.
Cash or a combination of cash and credit may be used to finance a commercial aircraft purchase. If your company owns the aircraft outright, it will be responsible for all maintenance, insurance and upkeep. Other options, such as finance leasing, may place some of these responsibilities on a third party.