NAFA member Adam Meredith, President of AOPA Aviation Finance Company, discusses what it means to be "pre-approved" when it comes to aircraft financing.
A pre-approval simply allows you to walk into a potential airplane deal already armed with the financial backing of a lender. It provides you leverage to act quickly and decisively, particularly in a tight, seller’s market like this one.
The typical loan application process can sometimes take four six weeks or more from start to finish. That process includes finding an airplane, vetting the airplane and vetting you. By the time all is said and done, you may have missed out on multiple airplanes.
Pre-approvals offer you the chance to jump-start the process by being vetted first. Once you’re good to go, you’re cleared to find the airplane of your dreams… as long as it’s similar in make and model to what you were pre-approved for in the first place. In other words, don’t get pre-approved for a Cessna 182 and then start window-shopping for Cirrus Vision SF50s.
This article was originally published by AOPA Finance on October 4, 2021.