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buying an aircraft

  • NAFA Administrator posted an article
    Do You Arrange "Cash Out" Financing? see more

    NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, answers your aviation finance questions.

    Question: I'm a relatively new private pilot and have a 2018 Cirrus SR20 G6 acquired 11/2020 for $520k through a single-member LLC on leaseback with a flight school (and Cirrus Training Center). The aircraft is starting to generate approximately $10k/month net of costs (~$4-5k). It should continue to generate this revenue as its located in California's climate good for year-round training. Hobbs is at 1440 right now & adding 55-60 hours p/month. I'm considering (re)financing the plane as it was purchased for cash. 

    Is this something I could get a quote on as an AOPA member? Do you arrange "cash-out" financing? 

    Answer: There are two challenges for this particular scenario: 1. The time since cash purchase and 2. The usage.

    In general, lenders are able to consider cash-out financing requests if the purchase was completed in the last 30 days. Some are willing to go up to 90 days max. Beyond that, cash-out financing throws up a red flag to lenders. They will question why cash is needed all of a sudden so long after the original purchase. Lenders want to steer clear of scenarios where borrowers are needing additional cash to support a struggling business. Because of this, lenders set limits on how long after a cash purchase they will consider cash-out financing.

    Click here for full article.

    This article was originally published by AOPA Aviation FInance Company on October 4, 2021.

  • NAFA Administrator posted an article
    NAFA is pleased to announce that Fly-On Aviation Finance has recently joined its network. see more

    FOR IMMEDIATE RELEASE: January 17, 2022                                   

    Contact: Tracey Cheek  

    tlc@nafa.aero 

    405.850.1292 

      

    Fly-On Aviation Finance Joins National Aircraft Finance Association 

    Edgewater, MD – National Aircraft Finance Association (NAFA) is pleased to announce that Fly-On Aviation Finance has recently joined its network of aviation professionals. Fly-On Aviation Finance is an independent aircraft and helicopter finance company with a strong track record of industry experience and a unique expertise to provide a wide range of creative lending options. 

    “NAFA members proudly support general and business aviation aircraft throughout the world and we’re happy to add Fly-On Aviation Finance to our association,” said Jim Blessing, president of NAFA. “As NAFA celebrates our 50th anniversary, we point to the many services our members offer to the public, including the work Fly-On Aviation does in the aircraft management and charter vertical.” 

      

    About Fly-On Aviation Finance: Fly-On Aviation Finance serves the greater Miami and surrounding areas and remains dedicated to serving clients with the highest levels of operating expertise and personable customer service. 

    With more than 15 years of lending experience, Fly-On Aviation Finance provides finance options from short-term bridge loans to capital leases to meet a wide range of aircraft specialized non-traditional financing solutions.  

    About NAFA:  The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members with the most up-to-date industry trends and best practices. Government legislation, market influences, and industry insights allow member companies to provide the highest quality services the industry has to offer.  

  • NAFA Administrator posted an article
    JETNET's Paul Cardarelli discusses how the pandemic challenges have affected business aviation. see more

    NAFA member, JETNET's Paul Cardarelli, discusses how the pandemic challenges underscored the advantages of business aviation with Rolland Vincent of Rolland Vincent Associates.

    Yes, deliveries of new business jets are up. So are sales of preowned aircraft and fractional shares, as well as jet card and block charter.

    And that makes it tough to meet the travel demands of both current and new business jet travelers! There just aren’t enough aircraft available when they want to fly.

    So how is the industry responding? And what does that mean to you?

    Listen to full podcast here

    This podcast was published by Business Aviation Advisor on November 22, 2021.

  • NAFA Administrator posted an article
    So what does it mean to be “pre-approved” when it comes to aircraft financing? see more

    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.

    Read full article here

    This article was originally published by AOPA Finance on October 4, 2021.

  • NAFA Administrator posted an article
    Purchasing a New Aircraft from Dassault Falcon Jet see more

    Asset Insight asked NAFA member, Paul Floreck, Senior Vice President Sales, U.S. & Canada, Dassault Falcon Jet, to describe what makes the purchase of a brand-new aircraft from the OEM a unique experience.  Topics covered include:

    • The new aircraft purchase process.
    • Capabilities and resources available to an aircraft buyer through Dassault.
    • Purchasing a new aircraft direct from the OEM – the added value.
    • The long-term relationship between an aircraft purchaser and the manufacturer.
    • The role the OEMs play within the business aviation community.
    • What makes Falcon aircraft unique in the market, and Dassault’s philosophy towards building and selling Falcons.
    • Dassault’s unique position among the business aircraft OEMs.

    Listen to the full podcast here

  • NAFA Administrator posted an article
    Tony Kioussis talks to Brad Harris about how his company helps aircraft purchasers and sellers. see more

    NAFA member and Asset Insight President, Tony Kioussis, talks with NAFA member, Brad Harris, President and CEO of Dallas Jet International, as they discuss how the firm he founded helps aircraft purchasers and sellers meet their private transportation needs through market knowledge and active participation during every step of a proven, streamlined process structured to ensure a successful outcome for the client. Topics covered include:

    • Determining the optimum aircraft to meet a client’s requirements.
    • Factors to consider in determining whether to purchase a new or an in-service aircraft.
    • The benefits of using an experienced acquisition consultant.
    • Determining and justifying an aircraft purchase price.
    • The process for establishing and overseeing a successful pre-purchase inspection.
    • Determining the correct State to close an aircraft transaction.
    • The optimum ownership period to replace an aircraft.
    • Strategies an owner can use to optimize the value of their asset.
    • The criteria that make one in-service aircraft more marketable over other similar assets.
    • The value an aircraft broker brings to the table when selling an aircraft.

    This Asset Insight podcast was originally published by Asset Insight in November 2021.

  • NAFA Administrator posted an article
    Adam Meredith, AOPA Finance, discusses why lenders request logbooks and what they are looking for. see more

    NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, discusses why lenders request logbooks and what they are looking for.

    Lenders need to know that an asset—their asset—is in good shape. Logbooks tell the story of the airplane—where it was owned, how it was maintained, if it needed repairs. If it did need repairs, how often and who did the work? Did each owner take equally good (or bad) care of the airplane? Logbooks are a forensically valuable part of what the lender sees as a property they’re going to own.

    Look at it another way. Think of logbooks as you might think of your own medical history. From the first page to the last, logbooks paint a picture of the airplane’s overall health. The lender may not scan every page, but certainly enough pages to discern any trends. Logbooks can significantly raise or lower the value of an aircraft. If pages—or complete logbooks—are missing, that lessens the airplane’s overall value.

    Read full article here

    This article was originally published by AOPA Finance on October 4, 2021.

  • NAFA Administrator posted an article
    Balance Sheet and P&L Details see more

    NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, discusses profit and loss statements and balance sheets as part of the aircraft loan package. 

    The profit and loss statement (P&L) and balance sheets are a requisite part of the aircraft loan package, but only when a business entity is part of the transaction. And by “part of the transaction,” we mean anytime any percentage of equity in a business contributes to the loan applicant’s income.

    Some people might say, “That’s not fair. The business isn’t buying the airplane. I am.” And that’s the point. The lender must feel comfortable knowing that your income stream will not be choked off should a business you have a stake in suddenly lose its revenue stream and/or have ballooning expenses.

    Quick primer: A P&L is a document that provides a snapshot of revenue vs. expenses over a specific time frame—either a calendar year (January-December) or a fiscal year (e.g. August-July). A P&L answers the questions, “What's the top line you're making? What's it costing you to make that? What are all the different pieces in between that you're having to pay for?” And finally, “What do you get at the end?”

    Read full article here

    This article was originally published by AOPA Aviation Finance Company on October 4, 2021.

  • NAFA Administrator posted an article
    Purchasing a New Aircraft from Dassault Falcon Jet see more

    NAFA member, Asset Insight asked Paul Floreck, Senior Vice President Sales, U.S. & Canada, Dassault Falcon Jet, to describe what makes the purchase of a brand-new aircraft from the OEM a unique experience. Topics covered include:

    • The new aircraft purchase process.
    • Capabilities and resources available to an aircraft buyer through Dassault.
    • Purchasing a new aircraft direct from the OEM – the added value.
    • The long-term relationship between an aircraft purchaser and the manufacturer.
    • The role the OEMs play within the business aviation community.
    • What makes Falcon aircraft unique in the market, and Dassault’s philosophy towards building and selling Falcons.
    • Dassault’s unique position among the business aircraft OEMs.

    Listen to podcast here

    This podcast was originally published by Asset Insight in October 2021. 

  • NAFA Administrator posted an article
    How to Understand Current Market Dynamics see more

    NAFA member, General Aviation Services' Don Spieth shows how he helps clients recognize the right opportunity in the aircraft market. Is it possible for buyers to get an aircraft that fits their mission without overpaying in today’s market?

    The past year has been quite a ride for the aviation industry. Mid-March through June of 2020 necessitated attendance at every possible online industry meeting, followed, in mid-August, by the creation of a quarterly market report with AMSTAT and Bloomberg.

    By the time it began dawning that the challenges induced by Covid-19 were creating a seller’s market, we had reached mid-September 2020.

    The initial demand shock with the onset of Covid-19 produced a similar reflex to that of the great recession in 2009; values of pre-owned business jets and turboprops fell to just below -20% when you measure the group averages across the Large Jet, Super Mid-Size, Mid-Size, Light Jet, and Turboprop markets.

    In Q3 2020, the downward trend began to stabilize, and the twelve-year-old buyers’ market finally turned. 

    Read full article here

    This article was originally published by AvBuyer on October 12, 2021.

     

     

     

  • NAFA Administrator posted an article
    How to Gauge Your Aircraft’s Marketability see more

    NAFA member, Asset Insight's Tony Kioussis offers some guidance on how it is possible to understand buyer and seller dynamics when it comes to valuing a business jet or turboprop on the pre-owned market.

    If you're seeking a deeper insight into the value of a private jet or turboprop on the pre-owned business airplane market, you'd do well to understand Asset Insight's ETP Ratio, how it's derived, and what it signifies.

    Imagine, for a moment, the following scenario where two business jets of the same make/model are listed for sale: The total time for one is 3,800 flight hours,while the second has accumulated 4,200 flight hours. Both are inviting prospective buyers to make an offer.

    Now imagine that one prospective buyer offers $4m for the higher-time aircraft, while another prospect offers $2.8m for the lower-time aircraft. Both offers are accepted. How did these two buyers justify their offer price?

    What the cursory information didn’t reveal is that the aircraft model in question has engine overhauls due at 4,000 flight hours, and the total cost to complete that event is estimated to be around $1m.

    Read full article here

    This article was originally published by AvBuyer on September 27, 2021.

     

  • NAFA Administrator posted an article
    Jetcraft's Danie Joubert, Vice President Sales - Africa, discusses business aviation in Africa. see more

    NAFA member Jetcraft's Danie Joubert, Vice President Sales - Africa, discusses business aviation in Africa.

    Interest in business jets has soared across Africa in the past 18 months. Whether responding to limited and declining airline options or pursuing the undoubted health and safety benefits of private jet travel compared to commercial flights, the business case for private aviation has gained in strength. At Jetcraft, we’re now receiving three times as many enquiries from potential new aircraft owners in Africa than before the pandemic.

    Increasingly, many companies are today expanding with new business units across more countries in Africa. As a result, air travel and aircraft to suit remain essential. Demand for business jet ownership is rising dramatically across the continent, as seen in countries such as Angola, Uganda and Ghana. In Kenya, which already has a strong installed base of short-range private aircraft used for tourism, we’re seeing growing interest in larger jets for longer missions. Established markets such as Nigeria and South Africa remain vibrant.

    Read full article here

    This article was published by Jetcraft on October 11, 2021.

  • NAFA Administrator posted an article
    Asset Insight Podcast: Efficient and Successful Transactions – the Aircraft Broker’s Value see more

    NAFA member, Brad Harris, President and CEO of Dallas Jet International, discusses how the firm he founded helps aircraft purchasers and sellers meet their private transportation needs through market knowledge and active participation during every step of a proven, streamlined process structured to ensure a successful outcome for the client. Topics covered include:

    • Determining the optimum aircraft to meet a client’s requirements.
    • Factors to consider in determining whether to purchase a new or an in-service aircraft.
    • The benefits of using an experienced acquisition consultant.
    • Determining and justifying an aircraft purchase price.
    • The process for establishing and overseeing a successful pre-purchase inspection.
    • Determining the correct State to close an aircraft transaction.
    • The optimum ownership period to replace an aircraft.
    • Strategies an owner can use to optimize the value of their asset.
    • The criteria that make one in-service aircraft more marketable over other similar assets.
    • The value an aircraft broker brings to the table when selling an aircraft.

    Watch podcast here

    This podcast was originally published by Asset Insight, Season 1, Episode 9

  • NAFA Administrator posted an article
    NAFA member and Jetcraft President Chad Anderson discusses "The Trade-In Transaction". see more

    NAFA member, Chad Anderson, President of Jetcraft, discusses the trade-in transaction.

    In private aviation, the decision to upgrade or replace an aircraft has traditionally required an owner to sell their asset to fund their purchase, a process that often takes months and involves considerable downtime on the ground. Trade-in transactions, on the other hand, provide a swift, and seamless alternative, where the broker or dealer accepts a client’s current aircraft in exchange for another. With a trade, the owner simultaneously transitions into ownership of their new aircraft, eliminating the risk of holding and selling their asset and avoiding a costly crossover period.

    Reducing transaction time and complexity

    A trade-in transaction essentially combines two events – the aircraft sale and purchase. There is only one contract, and an aircraft owner will deal with one invested partner for the trade, rather than two disconnected parties with bilateral interests. Importantly, the pre-buy inspections will also occur at the same time.

    Read full article here.

    This article was originally published by Jetcraft on August 31, 2021.

  • NAFA Administrator posted an article
    7 Avoidable Mistakes in Acquiring a Bizjet see more

    NAFA member, David G. Mayer, Partner at Shackelford, Bowen, McKinley & Norton, LLP, shares what to watch for when purchasing a private jet. 

    Acquiring a private jet aircraft is fraught with the potential to make expensive mistakes. Yet, a qualified aviation team can help a purchaser achieve optimal results by avoiding these seven missteps:

    GOING IT ALONE

    Assembling the right aviation team admittedly entails some cost and initial effort. But most purchasers quickly realize that buying a jet is not like buying a car, real estate, or other assets. Rather, a jet purchase or lease is complex and requires the assistance of aviation experts who excel in the subject matter and interact seamlessly on a deliberate closing schedule. Tax-intensive, cross-border, and novel purchases may require additional expertise beyond the core team members described below.

    Read full article here.

    This article was originally published on AINonline on November 13, 2021.