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How to finance a private jet


less than 1m read
·Nov 3, 2024

Will you take bank financing on the air?

Correct. Okay, so that's a key question because a bank, if they're going to loan money to you, usually what they say is the term of the loan plus the age of the airplane should not exceed 20 years.

So, meaning at the end of your loan, the airplane shouldn't be more than 20 years old. So, that's a key question because really you can get an airplane 25 years old; it’s going to be perfectly safe. The maintenance starts to get a little bit more expensive, and the issue is sometimes in the cockpit, the avionics, the radios up there, some of the service centers stop servicing some of these things.

So, you can't fix them; you have to replace them. And then, when you start replacing these kind of parts, it's, you know, it's $200,000, $300,000. It starts getting, you know, why did I do this?

And when money was cheap before the interest rates went up so high, if you think about it, if you're paying 3% money versus today, let's say 8 or 9 or 10%, and you want to borrow an extra $10 million, that's $300,000 a year in interest extra.

But if you get an airplane that's 10 years older, it might cost you $300,000 more in maintenance. I'd rather spend it on interest.

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