The three most common schemes for financing commercial aircraft are Airlines also typically have low margins so very few airlines can afford to pay cash for all their fleet.Ĭommercial aircraft, such as those operated by airlines, use more sophisticated leases and debt financing schemes. A Boeing 737-700, the type Southwest uses, is priced in the range of $58.5–69.5 million.
At closing, the loan documentation is executed and then funds and title are transferred.Īircraft are expensive and owning one requires hefty Capital Expenditure.If the borrower is deemed less credit-worthy, a surety from a third party (or from multiple third parties).A promissory note, which makes the borrower responsible for any outstanding loan balance not covered by repossession of the aircraft.A security agreement, which establishes a security interest in the aircraft, so that the lender may repossess it in the event of default on the loan.The lender then prepares documentation for the transaction:.In many cases, a title insurance policy is procured to protect against any undetected defects in title.
#AIRCRAFT FINANCE CALCULATOR REGISTRATION#
The lender performs a title search based on the aircraft's registration number, in order to confirm that no liens or title defects are present.The lender performs an appraisal of the aircraft's value.The borrower provides basic information about themselves and their prospective aircraft to the lender.A basic transaction for a small personal or corporate aircraft may proceed as follows:
Financing for the purchase of private aircraft is similar to a mortgage or automobile loan.
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