Thinking about buying a private jet or turboprop, but need financing? Aircraft loans don’t work like car loans — they’re closer to real estate or yacht financing, with stricter rules and higher stakes. Whether you’re considering a Gulfstream, Citation, or Pilatus, understanding how financing works can make or break your deal.
How Aircraft Financing Works
Most aircraft loans are structured around loan-to-value (LTV) and aircraft age:
- LTV: Banks typically finance 60–80% of the aircraft’s value. Expect to put down at least 20–40%.
- Terms: Usually 5–10 years, sometimes up to 12–15 for newer aircraft.
- Collateral: The aircraft itself, plus personal or corporate guarantees.
- Interest Rates: Generally 5–9% depending on borrower profile, aircraft type, and market conditions.
- Balloon Payments: Many loans end with a balloon, requiring refinance or resale.
What Banks Like to See
Banks focus on stability and resale value. They’re most comfortable with:
- Strong borrower financials: High net worth or proven corporate credit.
- Liquidity: Cash reserves covering at least 12–24 months of loan payments.
- Newer aircraft (<15 years old) with strong resale markets.
- Mainstream models: Gulfstream, Dassault, Bombardier, Embraer, Cessna.
- Engines enrolled in programs like Rolls-Royce CorporateCare or JSSI.
- Clean logs and records: No missing logbooks or maintenance gaps.
- Moderate usage: 200–400 flight hours per year, ideally for corporate use.
What Banks Don’t Like
Red flags that make lenders hesitate:
- Aircraft older than 20 years (especially if they’d be 25+ at payoff).
- Unenrolled engines → massive risk for unexpected overhauls.
- Obscure or discontinued models with limited resale demand.
- High-time aircraft compared to fleet averages.
- Heavy charter use (high wear, lower resale value).
- Complex ownership structures that make transparency difficult.
- Borrowers with volatile income or thin credit files.
Why Aircraft Age at Payoff Matters
Lenders think long-term. They ask:
👉 “How old will the aircraft be when the loan is finished?”
- A brand-new jet can get 10–12-year financing, by payoff, it’s still under 15 years old.
- A 10-year-old jet may only get 5–7 years of financing so it isn’t over 17 years old by maturity.
- A 15-year-old jet is nearly impossible to finance because it will be 20+ by the time payments end.
Banks want to avoid being stuck with a repossessed jet that’s too old to resell easily.
The Financing Process Step by Step
- Prequalification: Financial disclosure and credit review.
- Aircraft selection: Bank checks the aircraft type, age, and value.
- Appraisal: Independent market valuation.
- Offer: Loan terms (LTV, term, interest, balloon).
- Closing: Escrow, lien filings, FAA/ICAO registry compliance.
- Funding: Aircraft delivered, lien perfected.
Alternatives to Traditional Loans
- Operating leases for companies wanting flexibility.
- Lease-to-own structures.
- Specialty lenders (Global Jet Capital, Stonebriar, JetLease).
- Private banks (UBS, Citi Private Bank, JPMorgan Private Bank).
- Seller financing in rare cases.
Key Takeaways
- Aircraft financing depends on you and the aircraft.
- Lenders prefer jets that are financeable today and marketable tomorrow.
- Age, maintenance, and liquidity are the three pillars.
- For smooth financing, select an aircraft that will remain attractive to banks when the loan is repaid.
FAQs About Aircraft Financing
Thinking About Buying an Aircraft?
At PlanePost, we don’t just report on aviation — we connect buyers and sellers worldwide. If you’re exploring your first jet purchase or looking at financing options, we can guide you through the process and connect you with trusted lenders and advisors.
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