NAFA member David Fisher, President of Western Aviation, shares his first article in a new series of monthly articles about why fair market, orderly liquidation and forced liquidation values each answer a different credit question, and what a lender-grade appraisal should show for each.
Every aircraft loan rests on a number. The question is whether that number describes the aircraft actually sitting in the hangar, or an average aircraft of the same make, model and year.
Published value guides and asking prices are useful starting points. They are not collateral analysis. Two business jets with the same model year and similar total time can be hundreds of thousands of dollars apart once engine status, inspection timing, avionics, damage history and records quality are accounted for. A lender who advances against the average is lending against an aircraft it does not own a lien on.
Three values, three questions
A lender-grade appraisal should state more than one value, because a lender faces more than one scenario.
- Fair Market Value (FMV) is the most probable price between a willing buyer and a willing seller, neither under compulsion, with adequate marketing time. It answers: what is this asset worth in a normal sale?
- Orderly Liquidation Value (OLV) assumes a seller under some pressure but with a reasonable exposure period, typically 90 to 180 days with a competent broker. It answers: what do we recover if we have to sell?
- Forced Liquidation Value (FLV) assumes an auction-style sale under severe time constraint, often within 30 to 45 days. It is the floor.
This article was originally published by Western Aviation on October 16, 2026.