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  • NAFA Administrator posted an article
    NAFA Welcomes New Member: Boundary Aviation Solutions see more

    FOR IMMEDIATE RELEASE: March 18, 2024 

                                     

    Contact: Tracey Cheek
    tlc@nafa.aero  
    405.850.1292

    Terrence D. Eissfeldt 
    President 
    250.230.8288 
    tdeissfeldt@boundaryaviation.com 

     
    NAFA Welcomes New Member: Boundary Aviation Solutions 

      

    Edgewater, MD –  National Aircraft Finance Association (NAFA) is pleased to announce that Boundary Aviation Solutions, Ltd. has recently joined its network of aviation professionals. Boundary Aviation Solutions provides aircraft appraisal, brokerage and consulting services throughout the aircraft purchasing process.  

    “Boundary Aviation Solutions joining NAFA is a step forward in advancing our mission to improve and facilitate the financing process to support aircraft buyers,” said Ed Medici, NAFA President. We welcome Boundary Aviation Solutions to our growing organization and enhancing opportunities for all our members.”  

    About Boundary Aviation Solutions: 
    Boundary Aviation Solutions, a new aviation consulting firm, is proud to announce its launch under the leadership of Terrence D. Eissfeldt, a highly experienced aviation professional with over 40 years of industry knowledge.  

    Boundary Aviation Solutions offers a wide range of consulting services, including special projects, expert analysis, aircraft comparisons, technical records review, lease documentation and pre-lease and post-lease equality system reviews. With Eissfeldt’s extensive maintenance systems experience and operational and business knowledge, clients can expect real solutions tailored to their specific needs.  

    Boundary Aviation Solutions also offers services for importing and exporting, pre-buy inspections, and advice on aircraft purchases. All services are conducted with experienced and reliable attention to detail, ensuring complete transactions with no loose ends.  

    About Terrence D. Eissfeldt: 
    Eissfeldt began his career as an Aircraft Maintenance Engineer at Okahagan Helicopters in Richmond, B.C., Canada. Throughout his career, he has gained extensive experience in various parts of aviation, including field maintenance, heavy overhaul, quality assurance, technical records, inventory control, buying, shipping and receiving and project management.  

    In addition to his hands-on experience, Terrence has written and amended various Transport Canada, F.A.A. and E.A.S.A. compliant maintenance control and policy manuals, quality assurance manuals and other associated manuals. In 2021, he successfully completed the American Society of Appraisers (ASA) Aviation Appraisal courses, further enhancing his knowledge in this field.  

    Before launching Boundary Aviation Solutions, Terrence was a founding partner at West Coast Helicopters Maintenance and Contracting Ltd., where he served as the Chief Executive Officer from 2017 to 2021.  

    For more information, visit boundaryaviation.com.   

    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 on 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. 

     March 18, 2024
  • NAFA Administrator posted an article
    Sky-High Success: Bryan Byers’ Climb in Aviation Finance see more

    It all started with a one-line job ad at Indiana State University’s Career Center that jumped out to upcoming Aerospace Administration graduate Bryan Byers— Branch Analyst, and the phone number to Cessna Aircraft Company. Byers, now a tenured Aircraft Lender and Vice President at Scope Aircraft Finance and NAFA Vice President, had found the diamond in the rough he’d been searching for.  

    When he called the number, the human resource agent at Cessna said he was the first person who had applied for the job. Byers was shocked. That one small break brought Byers to the launch pad for his career in aviation finance.  

    The launch of a career in aviation financing 

    Byers came on board in the aviation industry at the right time. The General Aviation Revitalization Act of 1994, which jumpstarted manufacturing of small aircraft after a period of extended liability restrictions against manufacturers, started to open new positions for Byers. After answering the one-line ad, Cessna hired him to learn the basics of aircraft financing. While there, Cessna transferred Byers to Wichita, where he was immersed in the aviation industry that surrounded him, growing in his knowledge of the aviation industry.  

    Unfortunately, the role Cessna placed him in focused on banking, which steered Byers away from aviation. Byers was persistent, taking every opportunity to ask for a position in aviation. Finally, Cessna offered him the Regional Service Manager role, which first seemed more of a mechanical and maintenance position. But after looking at the job closer, the role entailed following up with customers behind on their payments to the bank-AKA a repossession agent, or “Repo Man.”   

    Byers’ unconventional role as the ‘Repo Man’ 

    Byers worked for two years as a repossession agent for small aircraft, working personally with the customers the bank represented. This experience gave Byers plenty of colorful stories and close calls, including when the electrical went out in the plane he was flying during the busiest time at Louisville International Airport without direction on when and where to land.  

    It was sometimes a dangerous job that came with unexpected twists and turns. One time, Byers went to take a plane, expecting not too much hassle since he constantly communicated with the owner about his late payments. Byers found the airplane, inspected it, and got it ready to fly home. “I’m checking everything out with the plane when I hear these size 17 shoes coming up quickly behind me. A big man is coming right up to me with his fist ready to punch me as I turn around. I see him ready to grab ahold of me and immediately go into defense mode—"Wait, Wait, Wait, Wait, Wait!”  

    Thankfully, after picturing waking up in a hospital after “lights out,” Byers expertly and nervously talked the owner into calming down and giving up the plane.  

    Overcoming ‘no’ and finding a home in aviation finance 

    After some time, Byers’ family was ready to leave Wichita and return to family in Indiana, so he began the search for work back home. He reached out to 1st Source Bank but was met with a solid no to any opportunities. But Byers doesn’t take no for an answer, especially after learning that “No” in lending is the norm, and a skilled professional will know how to work around it. So, Byers contacted that person’s boss and was offered a position. “Have him make you coffee,” the manager said. “I don't care what you do with him, but how many qualified aviation people do you know that also want to live in Indiana?”  

    After some time, 1st Source gave Byers a try at aircraft financing and sales. He had to call on everybody who owned an airplane in Indiana and Michigan to see how many people he could get to refinance their planes with the bank. Byers worked at 1st Source for almost 19 years before being recruited to work for Scope Aircraft Finance, where he has worked for four years. Throughout his career in aircraft finance, Byers has made his mark by constantly looking for the next person to buy or sell an airplane to and offering personable and excellent service throughout the life of the lending relationship. 

    According to Byers, everyone starting in aircraft financing will have challenges when they start. His advice for newcomers is to get comfortable with hearing no. “No is not necessarily a bad answer because it's just the law of averages that eventually you're going to get a yes from somebody,” Byers said. 

    NAFA’s role: Byers’ second home in aviation finance 

    Through the highs and lows, Byers found a second home in aviation finance with the National Aircraft Finance Association (NAFA). The connections made, the camaraderie with competitors, and the invaluable mentorship within the NAFA community have been pivotal to his success.  

    As an aircraft lender, Byers began attending NAFA events over 20 years ago. Because the aviation industry is small and connected, NAFA was a big help to him when he first got started. According to Byers, the NAFA connections he has made have helped him tremendously throughout his career, from the people he has met to learning more about his role and how to do his job better.  

    “It’s odd that you end up becoming friends (or Frenemies) with your competitors,” Byers said. “You can share stories and understand that everyone has the same goal of advancing the industry and doing a better job.”  

    Byers met one of his strongest supporters while attending NAFA. Charlie Sauter worked for a competitor, Scope Aircraft Finance. While they were competitors, Charlie saw they were like-minded in their love of aviation, values and work ethic. Byers found a valuable mentorship relationship, and Sauter helped guide Byers, eventually recruiting him to join Scope Aircraft Finance. 

    Byers emphasized the significance of holding onto mentors who provide insights into the trade, guiding newcomers through the intricate world of aviation finance. Especially in the first years in the aviation finance industry, the mentors available within the NAFA member community are invaluable. “Many people in this industry have high levels of knowledge and experience,” Byers said.  “If you can hold on to mentors to give you those little tips and tricks of the trade, you can find the right path for yourself, and I find that invaluable.”  

    Byers continues to go to NAFA events and become involved in areas such as the Light Aircraft Roundtable and in his role as Vice President. “I've met some of the most fascinating people that I never would have met any other way,” Byers said.  

    Beyond job titles 

    As Bryan Byers reflects on his journey from that one-line job ad at Indiana State University to becoming a tenured Aircraft Lender and Vice President at Scope Aircraft Finance and NAFA, the warmth for the aviation finance industry runs deep. “I still fly and look up every time something goes over my head to see what it is,” Byers said. “I just love the line of work we're in and can't imagine what I would have done without it.” Byers' path illustrates that a career isn’t just a series of job titles but a collection of experiences, challenges met head-on, and relationships built along the way.  

    This article was published by NAFA on March 4, 2024.

     March 04, 2024
  • NAFA Administrator posted an article
    NAFA Welcomes New Member: Piedmont Jets see more

    FOR IMMEDIATE RELEASE: February 28, 2024 

                                     

    Contact: Tracey Cheek 
    tlc@nafa.aero  
    405.850.1292

    Jared Hasty 
    Co-Founder 
    770.233.7518
    Sales@piedmontjets.com  
    https://www.piedmontjets.com 
     

     

    NAFA Welcomes New Member: Piedmont Jets    

     

    National Aircraft Finance Association (NAFA) is pleased to announce that Piedmont Jets has recently joined its network of aviation professionals. Piedmont Jets is a highly specialized, boutique aircraft brokerage and acquisition firm.  

    “Piedmont Jets joining NAFA is a step forward in advancing our mission to improve and facilitate the financing process to support aircraft buyers,” said Ed Medici, NAFA President. We welcome Piedmont Jets to our growing organization and enhancing opportunities for all our members.”  

    About Piedmont Jets: 
    Piedmont Jets leverages experience, efficiency and expertise to navigate clients through aircraft transactions. Driven by a team of experienced pilots with a love of aviation and building lasting relationships, Piedmont Jets aims to make transactions simple and seamless. 

    After careful analysis backed by industry-leading data, the Piedmont Jets team will source worldwide, on and off-market opportunities while managing the details of the procurement process.  

    Piedmont Jets provides a roadmap so clients are informed and empowered throughout the acquisition. The Piedmont Jets team uses its tools, processes and industry relationships to ensure maximum exposure and return on clients' investments. 

    For more information, visit piedmontjets.com.  

    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 on 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. 

     February 29, 2024
  • NAFA Administrator posted an article
    NAFA Welcomes New Member: Shore Premier Finance see more

    FOR IMMEDIATE RELEASE: February 23, 2024 

                                      

    Contact: Tracey Cheek   
    tlc@NAFA.aero   
    405.850.1292   

    Scott Walter 
    scottwalter@shorepremierfinance.com 
    757.995.0452

     

    NAFA Welcomes New Member: Shore Premier Finance 

     

    The National Aircraft Finance Association (NAFA) is thrilled to welcome Shore Premier Finance, the specialty lending division of Centennial Bank focused on passion assets. With $1.2B in assets, Shore Premier Finance is one of the nation’s largest marine lenders, and they’re adding aviation finance to their portfolio. 

    “NAFA members proudly finance, support or enable the financing of general and business aviation aircraft throughout the world, and we are happy to add Shore Premier Finance to our association,” said Ed Medici, President of NAFA.   

    Shore Premier Finance has joined NAFA as part of their efforts to expand into aviation and perform better due diligence, and representatives from Shore Premier Finance will be attending the NAFA52 Annual Conference as part of that initiative and to connect with industry leaders. 

    About Shore Premier Finance:
    Since 2012, Shore has provided financing for high-end power boats, sail boats, and superyachts and inventory finance for marine dealers. In 2022, Shore began providing financing for luxury motorhomes as a complement to its marine business.  As its focus on passion assets has expanded, Shore intends to add the finance of personal and business aircraft to its offerings as well. 

    To learn more about Shore Premier Finance, visit www.shorepremierfinance.com.  

    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 on 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. To add your company to our world-class network of the best in aircraft finance, sign up at https://www.nafa.aero

     February 23, 2024
  • NAFA Administrator posted an article
    NAFA Welcomes New Member: SVB Private see more

    FOR IMMEDIATE RELEASE – February 23, 2024 

     

    Contact: Tracey Cheek     
    tlc@NAFA.aero     
    405.850.1292     
     

    John Moran 
    Senior Vice President, Integrated Communications 
    John.Moran2@firstcitizens.com 
    212.461.5507 
     

    NAFA Welcomes New Member: SVB Private 


    The National Aircraft Finance Association (NAFA) is pleased to announce that SVB Private has recently joined its network of aviation professionals. SVB Private, part of First Citizens Bank and its First Citizens Wealth division, provides customized structured loans on turbine powered private aircraft to high-net-worth clients.  

    “NAFA members form a network of aviation finance services who diligently and competently operate with integrity and objectivity throughout the world,” said Ed Medici, NAFA President. “We’re excited to welcome SVB Private to our growing organization. Their services enhance NAFA’s available offerings, and we support their services to advance our members.” 

    About SVB Private: 
    SVB Private’s team of dedicated and specialized aircraft finance lenders can help optimize aircraft investment by providing customized lending solutions. These solutions allow clients to optimize their balance sheet by redeploying the capital they have invested in the aircraft. In addition, SVB Private competitively prices and structures loans commensurate with their clients’ personal and corporate banking relationships.   

    SVB Private provides a single point of contact, keeping the client fully informed throughout the loan approval and closing process. The bank leverages its deep understanding and connections within the private aircraft industry to help navigate the acquisition process, understand accounting treatments and FAA regulations, and align with other professionals to help make aircraft acquisition and ownership seamless and efficient.   

    Loan products for turboprops and jets include: 

    • Fixed and variable rate loans 

    • Acquisition financing 

    • Loan refinancing 

    • Pre-delivery payment financing for new aircraft 


    To learn more about SVB Private, visit https://www.svb.com/private-bank/

    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 on 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. To add your company to our world-class network of the best in aircraft finance, sign up at https://www.nafa.aero

     February 23, 2024
  • NAFA Administrator posted an article
    NAFA Welcomes New Member: Moore & Van Allen, PLLC see more

    FOR IMMEDIATE RELEASE:   February 22, 2024 

                                       

    Contact: Tracey Cheek    
    tlc@NAFA.aero    
    405.850.1292    

    Melissa Wier 
    Marketing Manager 
    melissaweir@mvalaw.com   
    704.331.2419  

     

    NAFA Welcomes New Member: Moore & Van Allen, PLLC 

    The National Aircraft Finance Association (NAFA) welcomes Moore & Van Allen, PLLC (MVA), a leading law firm with a dedicated aviation finance practice. MVA's team of over 400 attorneys brings extensive experience in complex aircraft financing transactions, including cross-border deals and structured financing for high-value assets. 

    “NAFA members form a network of aviation finance services who diligently and competently operate with integrity and objectivity throughout the world,” said Ed Medici, NAFA President. “We’re excited to welcome Moore & Van Allen to our growing organization. Their services enhance NAFA’s available offerings, and we support their services to advance our members.” 

    MVA's extensive experience in facilitating aircraft financing transactions will directly benefit NAFA members by providing access to invaluable legal expertise in navigating the intricacies of these transactions.  

     

    About Moore & Van Allen, PLLC: 
    An unwavering focus on their clients has led to steady growth as one of the largest law firms in the Southeast. Over 400 lawyers and professionals in over 90 areas of focus represent clients across the country and around the globe, including Blue-chip Fortune 500 organizations, financial services leaders, domestic and global manufacturers, retailers, individuals, and healthcare and technology companies. MVA clients benefit from a strategic, innovative approach to significant business transactions, complicated legal issues and difficult disputes. 

    MVA’s value is rooted in the experience gained over seven decades. Nationally recognized, culturally inclusive and community-spirited, they understand that success for their clients comes from investing in the strength of ideas and the power of collaboration.

    To learn more about Moore & Van Allen, PLLC, visit mvalaw.com  

     

    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 on 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. To add your company to our world-class network of the best in aircraft finance, sign up at https://www.nafa.aero

     February 22, 2024
  • NAFA Administrator posted an article
    NAFA Welcomes New Member: Lewis Brisbois Bisgaard & Smith LLP see more

    FOR IMMEDIATE RELEASE:  February 5, 2024

     

    Contact:  Tracey Cheek
    tlc@nafa.aero
    405.850.1292

    Rhonda Maggiacomo
    Partner
    Rhonda.Maggiacomo@lewisbrisbois.com
    Office:  401.406.3321

     

    NAFA Welcomes New Member: Lewis Brisbois Bisgaard & Smith LLP

     

    National Aircraft Finance Association (NAFA) is pleased to announce that Lewis Brisbois Bisgaard & Smith LLP has recently joined its network of aviation professionals. Lewis Brisbois’ experienced Business Aviation Practice serves as a strategic client partner with a comprehensive understanding of the federal regulatory and business matters surrounding the financing, acquisition, and operation of business aircraft. 

    “Lewis Brisbois Bisgaard & Smith LLP joining NAFA is a step forward in advancing our mission to improve and facilitate the financing process to support aircraft buyers,” said Ed Medici, NAFA President. We welcome Lewis Brisbois to our growing organization and enhancing opportunities for all our members.”  

     
    About Lewis Brisbois Bisgaard & Smith, LLP:  
    Lewis Brisbois is actively engaged in the representation of clients in more than 40 different practice areas with a multitude of sub-specialties associated with each practice area including an experienced Business Aviation Practice Group. The firm serves as a strategic client partner with a comprehensive understanding of the federal regulatory and business matters surrounding the financing, acquisition, and operation of business aircraft from structuring complex transactions (including drafting and negotiating corporate aircraft purchase and sale agreements) to understanding the intricacies of aircraft financing agreements and reducing liability exposure while capitalizing on both federal and state tax planning options. 

    Lewis Brisbois’ Business Aviation Practice group has experience assisting Fortune 500 companies, large international corporations, ultra-high net-worth clients, and family offices with all aspects of aviation financing for large long-range business jets, commercial aircraft, helicopters, and aircraft engines, including structuring, documenting, negotiating and syndicating aircraft financing transactions for various types of finance structures. 

    To learn more about Lewis Brisbois Bisgaard & Smith LLP, visit https://lewisbrisbois.com.  

      
    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 on 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. To add your company to our world-class network of the best in aircraft finance, sign up at https://www.nafa.aero

     February 05, 2024
  • NAFA Administrator posted an article
    What’s the Aircraft Financing Outlook for 2024? see more

    Rising interest rates, supply chain challenges and wars in Europe and the Middle East have created a turbulent time for the global economy. What has this meant for aviation finance? Gerrard Cowan learns what the industry experts are expecting in 2024...

    According to Brian Macbean, AOPA Aviation Finance’s Director of Credit and Sales, while the aircraft market is subject to macroeconomic conditions there is often a lag between changes in other markets and the aviation sector.

    “If things are steady on a macro level, the aircraft market will likely follow the same path,” he says. “If we see drastic changes in other major asset values (real estate, for example) which are sustained over time, we can expect to see changes filter into the aircraft market as well.

    “Keeping an eye on the economy as a whole will give aircraft buyers an indication of what to expect in the aircraft market in the coming months.”

    A Reasonable Baseline for 2024 Expectations...

    The main trend of 2023 was a general slowing of the market, Macbean says, primarily as a response to anticipated moves by the US Federal Reserve.

    “The cost of funds for lenders increased in 2023, and there may continue to be a slight increase into early 2024. That being said, the expectation is that costs will not rise as quickly, or comparatively as high as they did in 2023 – so the current market condition is a reasonable baseline for 2024 expectations.”

    Read full article here

    This article was originally published by AvBuyer on December 11, 2023.

     

     December 27, 2023
  • NAFA Administrator posted an article
    Explaining the Five Basic Steps of Financing an Aircraft see more

    The journey toward aircraft ownership can be an exhilarating prospect. Whether you’re a seasoned pilot or an aviation enthusiast with dreams of taking to the skies, owning an aircraft is enticing. However, before you can spread your wings and soar through the clouds, there’s an important part to consider— financing your aircraft.  

    Navigating the intricacies of aircraft financing can be challenging for beginners. The process involves a unique set of considerations, from understanding the financing options available to evaluating your financial capacity. This blog post breaks down the basics of aircraft financing, giving you the knowledge and confidence to make informed decisions on your journey toward aircraft ownership. 

    Prepare your financial picture  

    The first step in the aircraft buying process is having a clear picture of your financial situation and how this looks to a lender loaning money for an aircraft. Some things to consider at this point include:   

         1.  Interpreting your tax returns   

    One part of understanding what your financial picture looks like is what your tax returns convey to a lender. It’s fairly common to encounter individuals with large earnings who, due to their CPA and tax advisor’s expertise, show minimal income on their tax returns. While this is a testament to the financial team’s skill, it can present a challenge for aircraft lenders.    

    To navigate this, it’s imperative to view your tax returns from a lender’s perspective. This insight will dictate how much of an aircraft you can realistically afford, letting you set a budget for your purchase. Sometimes, it may even require a few years of financial planning to optimize your financial statements, particularly if you’re a business owner or plan to register the aircraft under a business entity.    

         2.  Planning and preparation   

    Preparation is key. Consult with business aviation and tax consultants, CPAs or financial advisors, who can shed light on your current financial state and what changes might be needed to enhance your financial standing for the eventual purchase. This knowledge can make a substantial difference in your ability to secure the financing you need.  

         3.  Consider your timeline   

    Understanding when you plan to buy an aircraft is equally important. For example, waiting until the last minute, as tax deadlines loom, to realize the need for an aircraft can lead to unnecessary financial stress. It’s beneficial to have these conversations well in advance to align your financial situation with your aircraft goals.    

         4.  Evaluating liquidity   

    Liquidity, as perceived by lenders, primarily revolves around cash on hand or in non-retirement investment accounts readily available in your bank. Lenders want assurance you have the liquidity to cover the required down payment, typically 15 to 20 percent. Moreover, they expect your down payment won’t deplete your liquid assets, and you will have additional funds set aside for related expenses, such as taxes, maintenance and hangar fees.    

         5.  Understanding taxable income   

    Lenders will also look at taxable income. This usually comes into play with business owners, where the difference between reported income on tax returns and the actual financial state of the business can be significant. Aircraft lenders focus on underwriting the individual rather than the business, which may require seeking lenders with expertise in underwriting businesses specifically.  

    Apply for a loan and get an approval   

    Your financial picture and standing also carry significant weight in the loan application process, which is the next step in financing an aircraft. Unlike more conventional loans for items like cars or houses, aircraft financing is in a league of its own.    

    This distinction comes primarily from the size of the aircraft market relative to other loaned assets. The aviation market is relatively small, and this has a profound impact on how lenders perceive risk. In aircraft financing, lenders do not have the luxury of spreading their risks across vast portfolios.    

    Due to the limited market size, aircraft lenders take a hands-on approach to portfolio management. The consequences of a loss on an aircraft are felt much more intensely compared to other asset classes. This reality is why the process for applying for an aircraft loan is markedly different and more comprehensive than for other, more commonplace loans.    

    Given the intricacies of the aircraft loan application process, it’s important to factor in the potential extra time it will take for approval. This means including ample time to complete the application and collect your supporting financial documents.    

    Documentation requirements for aircraft loans are usually demanding, especially if you have multiple businesses. Lenders typically ask for two to three years’ worth of comprehensive financial records, including tax returns and business financials. While long-term liquidity is rarely a major focus, recent bank statements may be needed to confirm the liquidity figures in the financial documents.    

    The next part of applying for an aircraft loan is the approval time frame. Lenders will provide an approval valid for up to 90 days, giving you time to identify an aircraft if you haven’t done so already. Some lenders, depending on the aircraft, may provide approval without a firm date but lock rates in before closing. Both of these pre-approvals will play into your overall purchasing timelines and goals. 

    Negotiate the purchase and creating a purchase and sales agreement   

    The next step in the aircraft financing process is to negotiate the purchase. This phase involves considering what should be included in the purchase and sales agreement.    

    Consider a few key elements in this phase, such as if a deposit or earnest money will be required to hold the aircraft; if so, is this refundable or non-refundable, and who will hold the deposit?   

    The purchase and sales agreement should include the four fundamental elements:   

    1. Identifying the buyer
    2. Specifying the seller
    3. Describing the aircraft  
    4. Stating the purchase price   

    Purchase agreements come in various lengths. The level of detail is less important than including these four essentials. Beyond these four elements, the agreement’s specifics are largely negotiable between the buyer and seller. Some buyers prefer comprehensive outlines, while others are more flexible.     

    Lenders will want to review a copy of the purchase agreement to ensure it is an arms-length transaction but also to provide critical information to determine the financing amount they should extend, gauge the down payment you can afford and outline the terms of the agreement.    

    One significant part that needs to be discussed in the purchase agreement is the pre-purchase inspection, especially on larger acquisitions. Lenders typically require this inspection to be conducted by a fair third party. Even if you have an A&P on staff, it’s advisable to use an independent party to reduce potential biases.    

    An important part of the negotiating process and the financing you receive from a lender revolves around the aircraft’s valuation. While the true value of an aircraft ultimately hinges on an agreement among the buyer, seller and lender, having a valuation serves as a useful first benchmark for estimating the general retail worth of an aircraft. A valuation considers a range of intangible factors, such as the model’s availability, its damage history, maintenance record and refurbishments and upgrades. Hiring a professional aircraft valuation service can help determine a good valuation for the aircraft you are considering.  

    Obtain insurance   

    A critical step in the aircraft financing process is insurance. Lenders will invariably insist on insurance as part of the financing arrangement. They will require both motion and not-in-motion coverage, which encompasses on-ground and in-flight scenarios.    

    Even if you plan to park the aircraft for an extended period, for example, an overhaul of the interior or new paint, the lender will still require comprehensive coverage. This includes liability coverage along with hull coverage. The specific limits for hull coverage will typically be set at either an amount equal to the loan or the purchase price. Note that these limits may vary from one lender to another. Some lenders are content if the loan amount is covered, while others may mandate coverage up to the full purchase price.    

    In addition to the breadth of coverage, lenders pay close attention to certain parts of the insurance policy. They look for breach of warranty coverage, meaning that even if the aircraft owner engages in activities not covered by the policy, the lender is still protected. Lenders insist on being listed as the loss payee on the insurance policy.    

    Additionally, some lenders may restrict the maximum allowable deductible, usually based on a percentage of the purchase price. As long as the deductible falls within a specified dollar limit or a percentage threshold, the lender will generally be comfortable. However, if the deductible exceeds these parameters, it may require further discussion with the lender.    

    If the insurance provider cannot offer a deductible within reasonable bounds, it’s worth considering and discussing with the lender. This open communication ensures all parties are on the same page and that the insurance coverage aligns with the lender’s expectations.  

    The closing

    With the approval secured and the negotiations finalized, you’re on the cusp of finalizing the acquisition of your aircraft. At this point, lenders will require the use of a title and escrow service for closing the transaction.     

    The title company plays a pivotal role by conducting a comprehensive title search on the aircraft, verifying there are no encumbrances or title discrepancies. This title search ensures the lender maintains a first lien hold on the aircraft.    

    Additionally, they can navigate the complex and often challenging FAA paperwork process. Their familiarity with FAA requirements guarantees the documentation submitted meets the agency’s standards. Many title companies have offices near the FAA records building in Oklahoma City, enabling them to file paperwork quickly on closing day. This expedites the confirmation of ownership, leaving no room for ambiguity in filed documents or the seller’s residual interest in the aircraft.    

    Ultimately, an escrow service eliminates uncertainties, benefiting the buyer and seller. The escrow service assumes the important role of helping transfer funds for the purchase, acting as an impartial intermediary.    

    After closing, the escrow service’s involvement ends. Unlike a mortgage scenario, there is no ongoing escrow account for taxes and insurance. These are independently managed outside of the purchase process. The lender remains focused only on receiving payments for the loan.    

    Prior to the closing process, you’ll want to make sure all aircraft documentation is complete. This includes Log book entries, maintenance records and annual inspections. Lenders typically request copies of the most recent annual inspection and any required phase one, two or three inspections.    

    Closing costs, including fees for the lender and sometimes brokers, will be factored into the transaction. These costs vary depending on the lender. Some may have a fixed fee despite transaction size, while others base the cost on a percentage of the transaction. This percentage can range from a quarter point to three-quarters of the transaction size.    

    It is strongly encouraged to involve professionals who specialize in aircraft title and escrow services. Without this expertise, mistakes can occur, potentially causing frustrating complications. For example, one common mistake is trying to include the aircraft under a business insurance umbrella without understanding the necessary coverages. Seeking insurance quotes from multiple aircraft insurance providers can help.    

    Conclusion 

    If you are considering purchasing an aircraft, it is important to understand the basics of the aircraft financing process. Aircraft financing stands apart from conventional transactions. Familiarizing yourself with the basics of aircraft financing sets the stage for a smoother and more enjoyable buying experience.    

    Understanding the five main steps outlined above empowers you to align your expectations. It lets you to determine the aircraft within your financial reach and timeline for making the deal and taking to the skies. From organizing your financial picture for potential lenders to ensuring all required paperwork is in order for the FAA, understanding the process can be rewarding.     

    Given the unique nature of aircraft financing, entrusting the process to specialized professionals is instrumental. Aircraft financing experts have the knowledge and experience to guide you through every facet of the journey with precision and professionalism. Their expertise adds immense value, ensuring your aircraft acquisition is a seamless and stress-free experience.

    Many thanks to Brian Macbean Director of Credit and Sales and Emily Meczkowski, Director of Operations & Marketing at AOPA of AOPA Aviation Finance Company for their contribution to this article.  

     December 05, 2023
  • NAFA Administrator posted an article
    What you Should Know About Aircraft Liens see more

    Can you be sure a pre-existing lien on your aircraft won’t come back to bite you? Gerrard Cowan polls a selection of experts to understand the nature of liens, how to check and safeguard against them, and what to do if a notice of foreclosure is served...

    Liens can be a complex factor in business jet ownership, posing financial challenges for aircraft operators. Owners must ensure they fully understand the nature of any liens on their own aircraft, according to industry experts, while buyers should secure the best possible industry advice in any transaction.

    There is a wide array of liens that can attach to an aircraft, its engines, or related components. But it is liens relating to financing that tend to be enforced more than other types, according to Brian Macbean, Director of Credit & Sales at AOPA Aviation Finance.

    “Any time the aircraft is used as collateral for a loan, the lender will file a lien on the aircraft. Lenders that specialize in aircraft financing often file liens on the aircraft, the engines, and the avionics,” he adds, pointing to the prevalence of mechanics’ liens, also.

    Liens on US-based aircraft should always be filed with the FAA, Macbean notes. “Depending on the specific scenario, a Uniform Commercial Code (UCC) filing could also be an effective method to assert interest or influence relating to an aircraft.”

    Liens generally fall into two categories, according to Lori McGee, Partner at Jetstream Aviation Law, including consensual and non-consensual liens.

    Consensual liens are typically agreed-upon between a lender and an owner, or another party with an interest in the property, McGee elaborates. For example, this could include aircraft mortgages and security agreements.

    Non-consensual liens arise by operation of law, not as the result of an agreement between the parties – mechanics’ liens being primary examples. In the US these are governed by state law and vary from one state to another.

    “Although the specifics of this type of lien are different in each state, generally speaking [they] are meant to provide a person that performs work or supplies materials for an aircraft with an interest in that aircraft to secure payment for such work or materials," McGee says.

    Read full article here

    This article was originally published by AvBuyer on November 20, 2023.

     

     November 27, 2023
  • NAFA Administrator posted an article
    NAFA Welcomes New Member: Arrow Financial see more

    FOR IMMEDIATE RELEASE: November 14, 2023     

                                    

    Contact: Tracey Cheek  
    tlc@nafa.aero  
    405.850.1292  

    Steve Henley
    President 
    Steve@arrowsone.com 
    262.331.1981 

    Scott Sims 
    Business Manager 
    scott@arrowsone.com 
    224.225.1410 

      

    NAFA Welcomes New Member: Arrow Financial 


    National Aircraft Finance Association (NAFA) is pleased to announce that Arrow Financial has recently joined its network of aviation professionals. Arrow Financial  is a financial service organization that works with individuals and dealers in aircraft, recreational vessels and vehicles to meet their financing needs.   

    “NAFA members proudly finance, support or enable the financing of general and business aviation aircraft throughout the world, and we are happy to add Arrow Financial to our association,” said Ed Medici, President of NAFA.  

    About Arrow Financial:  
    Arrow Financial LLC is a full-service recreational lender that recently entered the financing world of aircraft for individuals and dealers. The company is a service-disabled veteran-owned small business (SDVOSB). The team consists of experienced professionals with over 100 years of experience providing prudent financing solutions for individuals and dealers. 

    For more information about Arrow Financial, visit arrowfinancialllc.com

    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 on 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.  

     November 15, 2023
  • Uptimize Marketing posted an article
    Optimizing Aircraft Financing: Navigating Tax Benefits and Ownership Structures see more

    Income tax benefits are generally unaffected when an aircraft purchaser is deciding whether to finance or buy an aircraft with cash. Available depreciation schedules (including bonus depreciation and other forms of accelerated depreciation) are not affected and are available in both financed and cash acquisitions.  

    However, there are a few key areas in which tax planning and aircraft financing intersect. One key area is the aircraft’s optimal (or required) ownership structure.  

    Some lenders require that an individual taxpayer owns the aircraft ownership LLC rather than an operating company or other business entity. Even if the taxpayer’s entities are “passthrough entities” flowing to the taxpayer’s Form 1040, this ownership structure can be problematic from an income tax reporting perspective.   

    In this situation, the taxpayer may be prohibited from taking accelerated depreciation because they used a related party leasing structure. An IRS audit could also challenge the aircraft's deductibility because the aircraft is reported on a standalone basis (separate from the applicable operating company or companies). In addition, this standalone reporting may create a poor optic on the taxpayer’s Form 1040 by creating a large loss on their Schedule C or Schedule E, drawing substantial attention to their tax return. Aviation tax advisors often steer their clients away from these ownership structures in favor of parent/subsidiary structures with the aircraft ownership LLC wholly owned by an operating company. 

    Another key area where aircraft financing and aviation tax planning overlap is basis generation when the aircraft deductions are reported on a Form 1120-S (S-Corporation tax return). In this instance, a personal guarantee from the individual taxpayer is not enough to create debt basis for the individual taxpayer in the S-Corporation if the loan structure features the S-Corporation or a wholly owned subsidiary of the S-Corporation as the borrower.   

    Aviation tax advisors often propose making the individual taxpayer the borrower to solve this problem. This enables the individual to either contribute the loan proceeds to the S-Corp or implement a mirroring note with the S-Corp as the borrower and the individual as the lender. Both options may help create the needed basis for the individual taxpayer in the S-Corp. This basis generation may be critical to the taxpayer if the taxpayer hopes to use the available income tax deductions from the aircraft in the acquisition year. Insufficient basis can delay the taxpayer’s ability to take deductions or limit the taxpayer’s ability to take distributions from their S-Corp without income tax liability.  

    Working with an aviation tax professional can help with the issues mentioned above. Once potential borrowers sort through these items, they will be better positioned to choose between financing or paying in cash based on what makes sense for their finances and cash flow rather than how it impacts their income tax deductions and tax planning.  

    By KJ McCarter, CPA, Aircraft Tax Advisor and Daniel Cheung, CPA, Principal at Aviation Tax Consultants, LLC 

    NAFA members KJ McCarter and Daniel Cheung at Aviation Tax Consultants, LLC discuss the intersections of aircraft financing and aviation tax planning, including navigating ownership structures and basis generation.   

     

     November 06, 2023
  • NAFA Administrator posted an article
    NAFA Welcomes New Member: Corporate Jet see more

    FOR IMMEDIATE RELEASE: October 11, 2023                                    

    Contact: Tracey Cheek 
    tlc@nafa.aero
    405.850.1292  

    Contact:  J Vernon Pitman 
    jvernon@corporatejet.com
    702.598.4000 

    Contact:  Chuck Woods
    chuck@corporatejet.com 
    707.372.5078   

     
    NAFA Welcomes New Member: Corporate Jet  
      

    National Aircraft Finance Association (NAFA) is pleased to announce that Corporate Jet has recently joined its network of aviation professionals. Corporate Jet provides brokerage and acquisition services to customers worldwide.  

    “NAFA members facilitate the financing of general and business aviation aircraft on a global scale,” said Ed Medici, NAFA President. “We welcome and support Corporate Jet’s services that play a role in advancing the interests of NAFA members within the aviation industry.” 

    Corporate Jet was established in 1966 to provide comprehensive acquisition and sales services to its customers worldwide. Its analysts and sales professionals offer end-to-end service, reducing clients’ risk and maximizing their financial position. The company specializes in business aviation fleets but has also modified air ambulances and converted passenger airliners to freighters. 

    Corporate Jet recently announced Chuck Woods as Executive Vice President. Woods brings a wealth of experience and knowledge to Corporate Jet with 45 years of executive management, flight operations, business development and sales. His recent executive postings included China Business Aviation Group and Jet Asia Limited. 

    “We are very excited that Chuck has chosen to join our team,” said J Vernon Pitman, Corporate Jet president. “He is already affecting our transaction volume.” 

    Woods expressed his gratitude for the opportunity, commenting, “I’ve worked with J Vernon for a number of years and am pleased to contribute to a storied brand with 57 years of success.” 

    For more information about Corporate Jet, please see www.corporatejet.com

    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 on 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.  

     October 11, 2023
  • NAFA Administrator posted an article
    3 Aircraft Finance Application Mistakes to Avoid see more

    Business jet owners can access a range of financing options when acquiring or upgrading aircraft. However, errors and oversights could undermine their efforts to secure funding, as shared by some of the aircraft finance industry’s leading experts.

    While aircraft obviously have their own specific needs and challenges, applying for an aircraft loan isn’t so different from other types of loans, says aviation analyst Brian Foley.

    “Inaccurate financial information, asking for too much or too little money, lacking collateral, an inadequate credit rating, not revealing past red flags, and not securing expert assistance could all result in an undesirable outcome,” he warns.

    1) Aircraft Finance Mistakes: Failing to Provide Information

    Aircraft-related information is usually not a major stumbling block for a transaction, but providing a certain amount of information up front can result in a faster process, according to Robert Gates, head of international sales at Global Jet Capital.

    “With a Manufacturer Serial Number (MSN), Global Jet Capital can quickly learn a lot about the aircraft during initial review,” he illustrates. “However, a detailed aircraft spec sheet is good practice at the time of a financing inquiry.”

    Providing information up front will expedite an aircraft review, says Gates. It’s important in a range of areas, including configuration, maintenance status and damage history.

    “Applicants should also provide information relating to the desired use patterns for the aircraft post-acquisition,” he adds. “What are the typical missions? How many hours per year do you expect to fly? Who will manage the aircraft? Where will it be based, and will it be hangered? This supplementary information is useful to the financier and will help fill out the application file.”

    Applying for aircraft finance can feel like an onerous process, but it’s important to take the time to ensure it’s done correctly. Gerrard Cowan speaks to industry experts about some of the common applicant errors to avoid.

    Read full article here

    This article was originally published by AvBuyer on September 7, 2023.

     September 20, 2023
  • NAFA Administrator posted an article
    Big Costs to Factor Beyond a Jet's Asking Price see more

    Buyers of pre-owned business jets face a range of costs beyond the ask price, some of which might be unexpected. What costs do they need to account for, and how can they avoid any nasty surprises? Gerrard Cowan asks the experts...

    First-time buyers can often be ‘a little surprised’ by the high costs of ownership, which go well beyond the initial purchase price, says aviation analyst Brian Foley. The costs of hangaring, maintaining, insuring and crewing their newly acquired aircraft can amount to millions of dollars annually.

    Indeed, there have likely been numerous one-time, after- purchase discoveries for those who bought without a Pre-Purchase Inspection, he says, “which could easily cost as much as the airplane did to get airworthy again. Some of these buyers have already cut their losses and returned to their Economy Plus airline seat or charter.”

    You Can Remove the Unpredictable Aircraft Maintenance Costs

    Aircraft maintenance is a Pandora’s Box, according to David Caporali, Senior Vice President, Business Development for the Americas at Jet Support Services, Inc (JSSI), a National Aircraft Finance Association (NAFA) member.

    Such maintenance costs take many buyers by surprise, he says, and this needs to be a vital consideration in the aircraft selection process. Indeed, it can be one of the largest variable costs in aircraft ownership, including all parts and labour, and can account for up to 35% of the aircraft’s operating budget.

    “Outside of certain scheduled inspections and replacement items (that can be tracked through maintenance software) there is no way to anticipate when a part will break, making maintenance very difficult to budget for,’’ Caporali elaborates.

    “‘Scope creep’ is common during any aircraft inspection, as additional squawks are often found. We have seen many work orders double or even triple the initial expected cost of a certain inspection.”

    Read full article here

    This article was originally published by AvBuyer on July 5, 2023.

     September 05, 2023