Since the recession, people have been saying lending institutions are not interested in underwriting general aviation purchases but nothing could be further from the truth, according to National Aircraft Finance Company Vice President National Sales Mike Smith.

“There are plenty of financing options around for all sorts of owner-flown aircraft,” he told Aero-News Network. “There is increased demand because aircraft purchasers had better things to do with their money so they turn to financing. Money is relatively cheap and they’ll use their cash to invest in something that will give them a higher return such as the growth of their business. The smaller-end buyer may also want to save their money and they will also turn to the finance market.”

Airfleet Capital Vice President Jim Blessing agrees but recalled the decline in all financing during the post-recessionary 2008-2010 period. “That was a difficult market but that is not the case any more especially for the domestic US financing market,” he said. “about 25% of the jet market finances their aircraft and the rest pay in cash, according to industry statistics. It’s the same for the piston market – only about 25-30% of GA finance their aircraft. The banks are all healed now and new banks are entering the market. In fact, there is a strong appetite to support general aviation purchases.”

Blessing noted that its clients turn their aircraft over about every four to five years and he is seeing more interest in financing aircraft from the consumer and the banking community alike. He indicated interest was up from 2014 to 2015 and it is rising again this year.

Both NAFCO and Airfleet Capital said the type and terms of the financing generally depends on the type and age of the aircraft. However, rates are averaging in the 4% to 4.5% range for newer aircraft over 15 to 20 years. However, Smith said rates can be as high as 6%.

“It really depends on the amount of the down payment,” said Blessing. “The higher the down payment, the lower the rate and the larger the loan lowers the rate. We finance between 350 to 500 units per year.”

Smith added that it also depends on the age and model year to determine the terms of an actual deal. What sets NAFCO apart, however, is the fact that it finances experimental aircraft and older boutique aircraft, he said, adding that there is also a growing interest in financing light jets.