NAFA member AOPA Finance shares part two of their two-part series on aircraft loans and financing to ownership structure.
In the first part of this two-part series, “Common Reasons Loans Stall Out—and How to Keep Your Deal on Track,” we covered how thorough, accurate documentation—from financials to proper registration—helps lenders clearly assess risk and keeps the aircraft financing process moving forward. A second aspect of purchasing an airplane that must be addressed early on is ownership structure. Often, in the case of turboprops and jets, ownership structure is something other than an individual. Both lenders and the FAA need to clearly understand the complete chain of ownership.
Is the ownership entity an LLC formed by an individual specifically for the aircraft (e.g. My Airplane LLC)? Or is it an aircraft ownership LLC owned by the borrower’s widget manufacturing company? Or is it the borrower’s holding entity, which owns the widget manufacturing company that will own the aircraft ownership LLC? Those multitude of layers must be clearly traced back to the individual or the entity that is guaranteeing the loan. It’s best to determine the ownership structure early on and commit to it.
Often, we’ll see a borrower identify an aircraft, get everything all set up, and sign a purchase agreement based on the individual buying the aircraft. Afterwards, they may talk to their financial advisor who advises them to establish ownership through an existing entity or to create a new structure for tax savings or liability protection. A change in ownership structure will require amended or additional documentation, creating a choke point in the loan process.
This article was originally published by AOPA Finance on May 18, 2026.