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  • NAFA Administrator posted an article
    Credit Score and Locked Credit Effects on Loan Apps see more

    NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, discusses credit scores and how they affect your loan.

    Depending upon which bucket your score falls into, there are two ways credit score will affect the loan—your interest rate and/or your loan structure.

    Credit doesn't typically have a significant impact on the interest rate associated with an aircraft loan, although it could potentially be a gating issue. In our experience, the biggest way someone's credit score affects the ability to secure a loan is if it's below 700. Broadly speaking, credit score parameters fall into one of four buckets:

    • Under 680
    • 680 to 700
    • 700 to 730
    • And over 730

    Depending upon which bucket your score falls into, there are two ways credit score will affect the loan—your interest rate and/or your loan structure.

    In reality, a 730 score is as good as an 800 score and vice versa. It's a truism not widely discussed. What really matters is a credit score below 680. Below that, deals are difficult to secure.

    Read full article here.

    This article was originally published by AOPA Finance on October 28, 2021.

     

  • 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
    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
    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
    Fly It Like You Bought It - Treating Aircraft With Care see more

    NAFA member, AOPA, discusses treating your aircraft with care.

    Nailing the power-off one-eighty is a source of pride for aspiring commercial pilots. It’s a precision maneuver done with throttle closed on the downwind leg of the pattern abeam a designated touchdown spot on the runway, often the 1,000-foot markers. An acceptable landing falls not before and within 200 feet beyond the spot; otherwise, it’s a practical exam bust.

    All too often, candidates focus on planting the aircraft in that narrow window and forget about landing with any sort of grace. Such carrier landings may be appropriate at sea, but they have no place as a normal procedure because they exact an unnecessary toll on the aircraft. I think to myself, “If these folks owned the aircraft and paid for the maintenance, they would strive for better landings, spot be damned.”

    Read full article here

    This article was originally published by AOPA on September 1, 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
    How To Get A Loan For An Aircraft see more

    NAFA member, Jason Zilberbrand, President & CTO of VREF, discusses aircraft loans.

    Getting a loan for an aircraft of your choice can be an endeavor; however, financing is an available option (of course, depending on a few factors).

    You might first assume that obtaining a loan for aircraft is a similar process to buying a car. In reality, funding your plane through a lender follows more closely with buying a home.

    The time frame is longer. Lenders offer different rates depending on your net worth, credit history, and aircraft model. How you plan to use the airplane can also be a consideration. There are also more types of lenders than one might be aware of, from large banks to regional credit unions. We will go through them all.

    Read full article here.

    This article was originally published by VREF on July 7, 2021.

  • 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
    Simmons Bank Joins National Aircraft Finance Association® see more

    FOR IMMEDIATE RELEASE: October 27, 2021                                 

    Contact: Tracey Cheek

    tlc@nafa.aero

    405.850.1292

     

    Simmons Bank Joins National Aircraft Finance Association®
     

    Edgewater, MD.– National Aircraft Finance Association (NAFA) is pleased to announce that Simmons Bank has recently joined its professional network of aviation lenders. NAFA members will have access to Simmons Bank’s comprehensive financial solutions delivered with a client-centric approach. The Pine Bluff, Arkansas-based company, founded in 1903, has total consolidated assets of approximately $23.2 billion in 198 financial centers, conducting financial operations throughout Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

    Simmons Bank and its subsidiaries provide complete banking services to individuals and businesses throughout the market areas that they serve. Services include consumer (credit card and other consumer), real estate (construction, single-family residential and other commercial) and commercial (commercial, agriculture and financial institutions) loans, checking, savings and time deposits, trust and investment management services and securities and investment services. In 2021, Forbes has named Simmons to the lists of Bank Best-in-State Employers, Best-in-State Banks, World’s Best Banks and Best Banks in America.

    As vice president of Simmons Bank, Jim Lewis has over 30 years of experience leading private jet management operations by successfully creating and implementing services to meet the unique travel needs of the world's most high net-worth corporations and individuals. He is responsible for the successful creation and implementation of new, first-to-market industry services.

    During his career, Lewis has led the establishment of multiple business units, operational facilities, and start-ups, resulting in the capture of more than $275M in revenue and $300M in annual asset transactions.

    “NAFA members proudly finance, support or enable the financing of general and business aviation aircraft throughout the world and we’re happy to add Simmons Bank to our association,” said Jim Blessing, President of 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
    Global Jet Capital Exclusive Infographic: Why Fortune 100 Companies Are Flying Private see more

    NAFA member Global Jet Capital shares their exclusive business aircraft infographic.

    Business aircraft are an invaluable tool for the top global businesses. Public records indicate that at least 95% of the Fortune 100 top businesses utilize business aviation.

    There are at least 323 aircraft registered publicly to the Fortune 100 companies, with the median company owning 3 aircraft.

    Financing plays a major role in companies’ aircraft ownership – more than one-in-five aircraft have a lease or loan attached to it.

    Read full article here.

    This article was originally published by Global Jet Capital on July 27, 2021.

     

     

  • NAFA Administrator posted an article
    NAFA member JSSI Advisory Services shares what you need to know about aircraft appraisals. see more

    NAFA member JSSI Advisory Services shares what you need to know about aircraft appraisals. 

    What is an aircraft appraisal?

    Appraisals are used across the board to determine the value of assets. You may have encountered an appraisal while securing your home mortgage, for example, and they are also used to determine the worth of your business aircraft. The American Society of Appraisers (ASA), the governing body for appraisal accreditation, defines the process as “an unbiased, third-party opinion of value.”

    When you own and operate an aircraft, you may need to keep a finger on the pulse of your asset’s current value for tax and depreciation purposes, but it’s also important to be informed if you wish to refinance or sell your jet, turboprop or helicopter. Aircraft appraisals are often a required condition from many lenders and lessors prior to entering a financial transaction.

    Read full article here.

    This article was originally published by JSSI Advisory Services on July 19, 2021.

     

  • NAFA Administrator posted an article
    Adam Meredith, AOPA Aviation Finance, answers your aviation finance questions. see more

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

    Question: I see on AOPA Finance that I can potentially finance an engine overhaul with sufficient equity in the plane. What are my options for financing a plane that will need an EO almost immediately after purchase? I am willing to put enough down on the note so that there is sufficient equity in the plane for an EO loan if I can roll that in. To be explicit, the plane is $37,500, and the EO estimate for that engine is $24,000. I am not sure what the equity requirement is, but let's say it is 40%. So, what I would hope is that I can get a loan  for $46,500 by putting down $15,000 on the plane, with the loan then completing the purchase price with $22,500, leaving $24K in the note for the EO. If the EO goes over that, I would just eat that cost myself.

    Answer: Rolling an overhaul into a purchase is a fairly simple process. As part of our internal review and the lenders’ underwriting, two values for the aircraft will be determined. One as-is for the purchase and a second with a zero-time engine. Financing can be up to 85% of the final value with the overhaul included. In your example, assuming value is roughly equal to cost, financing would look like $31,875 towards the purchase (85% of $37,500) and $20,400 towards the engine for a total loan of $52,275. The initial $31,875 would be disbursed at the time of purchase with the remaining $20,400 disbursed once the engine has been installed and signed off by the A&P. We would be happy to discuss the details further if you would like. Just give us a call at 800.627.5263.

    Read more.

    This article was originally published by AOPA Aviation Finance Company on July 7, 2021.