NAFA member David G. Mayer, Partner at Shackelford, McKinley & Norton, LLP, shares his latest article on aircraft refinancing.
Cash is king, but using other people's money could be more advantageous.
A subtle shift toward refinancing business aircraft appears to be underway. Although an estimated 70% of aircraft buyers pay cash, these figures do not reflect financing trends I have noticed in loan and lease activity since 2025 amid robust demand for business aircraft. Perhaps this preference for paying cash is softening as buyers conclude that it results in lost financial opportunities, a counterproductive allocation of capital, and a diminution in accumulated wealth.
Two Categories of Refinancing
At a high level, aircraft refinancings fall into two broad categories: secured loans and sale-leasebacks. A refinancing here refers to a loan or lease (financing) completed after the aircraft purchase date.
In a secured loan, a lender disburses funds to an owner/borrower in one or more advances, including new aircraft progress payments. The lender secures repayment by obtaining a security interest in the purchase agreement, the aircraft and related assets under a security agreement/ mortgage.
A true sale-leaseback occurs when an owner sells the aircraft to a buyer/lessor at 100 percent of the agreed-upon sale or market value and then leases it back to the selling owner. A lease of a business aircraft under the Uniform Commercial Code (UCC) generally means a transfer by a lessor to a lessee of the right to possess and use the aircraft for a term in return for consideration, such as hourly, fixed, or variable rents. Lessors also fund progress payments and convert them into a lease.
This article was originally published by AINsight on May 8, 2026.