Chris Miller and Megha Bhatia sat down with the National Aircraft Finance Association (NAFA) to discuss traditional lending and alternative financing options.

“With traditional lending, the loan application process is a critical step for a financial institution to assess the credit worthiness of a client and requires credit checks and audited financials. This enables favorable rates but can take time, as the loan is executed against the credit profile of an individual or organization. Additionally, most banks are less likely to participate in loans for aircraft over ~15 years.

The surge in new entrants to our industry over the last few years filled up demand for OEM deliveries and consequently pre-owned aircraft, leading to record low inventory levels and an increased interest in older planes. While we are seeing these trends normalizing, and OEMs increasing production rates to match demand – options to the traditional lending process have developed as a response to the need for speed and ease throughout the financing process, especially for mid-to-older vintage jets.

Specialty asset-based lenders are able to underwrite an aircraft as a whole, providing more flexible financing structures. Since a credit application isn’t required, this is especially helpful for applicants who may not meet the investment profile of traditional lending. The loan is structured differently, against the asset value instead of the credit profile of the owner; this forms a synergistic partnership between the Lessor and Lessee to maintain or even enhance the residual value of the aircraft.”

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About JSSI  

For more than 30 years, Jet Support Services, Inc. (JSSI) has been the leading independent provider of maintenance support and financial tools to the business aviation industry. With 6,000+ aircraft supported by maintenance programs and software platforms, JSSI leverages this wealth of data and purchasing power to drive cost savings and provide custom solutions that align to the interests of each client, regardless of make or model. Learn more at jetsupport.com.

JSSI products and services include:

Maintenance Programs. Hourly Cost Maintenance Programs to stabilize maintenance budgets, maximize aircraft availability and enhance residual value.

Parts & Leasing. Procurement professionals who leverage JSSI’s scale and go beyond parts sourcing to find optimal customer solutions.

Maintenance Software. Innovative digital tools that deliver actionable maintenance intelligence to enable better maintenance decisions.

Conklin & de Decker. Impartial and accurate data to deliver full transparency into real-world aircraft operating costs.

Advisory Services. Objective insights and independent technical advice from a global team of technical advisors and ASA-accredited appraisers for virtually any business jet, turboprop or helicopter.

Aviation Capital. Customized asset-based finance solutions for business aviation.