There is good news and bad news when it comes to financing for pre-owned business aircraft. The good news is that financing is available for aircraft buyers; the bad news is that banks are primarily lending only to those with exceptionally good credit who are buying an aircraft that is less than 20, and even in some cases less than 10, years old, according to a panel of aircraft financiers at the recent NBAA Aircraft Registration, Finance and Legal Conference in St. Petersburg, Fla.
According to Mike Kahmann, group head and managing director of CIT Business Aircraft Finance, banks are simply trying to establish a margin of safety in aircraft finance deals. “Depreciation is a big part of that margin,” he said. “Three- to 6-percent depreciation is consistent with a 15- to 20-year life of an aircraft, so banks now look at a business aircraft as a 20-year asset, at maximum.”
