Flying has always been a fascination for people around the world. Whether it’s for personal or commercial purposes, aircraft have become a necessary mode of transportation for many people. However, owning or leasing an aircraft can be an expensive endeavor. That’s where aircraft financing comes in. Here are the basics of aircraft financing, the types of financing available, and how to obtain financing for your aircraft.

What is Aircraft Financing?

Aircraft financing refers to the various ways of obtaining funds to purchase or lease an aircraft. It’s a specialized form of financing that involves unique risks and complexities due to the high cost and technical nature of aircraft. Financing an aircraft requires a lot of money, and the loan is secured against the aircraft. This means that if the borrower fails to make payments, the lender has the right to repossess the aircraft.

Types of Aircraft Financing

Cash Purchase

The most straightforward way to finance an aircraft is through a cash purchase. The buyer pays the full amount upfront and takes ownership of the aircraft. This method is ideal for those who have the resources to pay the full amount without needing to borrow money.

Bank Loans

Bank loans are the most common way of financing an aircraft. Banks offer loans that are secured against the aircraft, with the aircraft acting as collateral. Compared to other forms of financing, these loans generally come with reduced interest rates.


Leasing an aircraft is another popular way of obtaining an aircraft. In leasing, the lessee (the person leasing the aircraft) pays a monthly fee to the lessor (the person who owns the aircraft). At the end of the lease term, the lessee can either return the aircraft to the lessor or purchase it at an agreed-upon price. There are two types of leases: operating leases and finance leases.

a. Operating Leases

Operating leases are short-term leases that are usually less than five years. The lessee pays for the use of the aircraft during the lease term, but the lessor retains ownership of the aircraft. This type of lease is ideal for those who want to use an aircraft without committing to a long-term financial obligation.

b. Finance Leases

Finance leases are long-term leases that are usually more than five years. In a finance lease, the lessee pays for the use of the aircraft and has the option to purchase the aircraft at the end of the lease term. This type of lease is ideal for those who want to use an aircraft for a long time but cannot afford to purchase the aircraft outright.

Fractional Ownership

Fractional ownership is a way of sharing ownership of an aircraft with other individuals or companies. The owner of the aircraft (usually a company) divides the ownership into shares, and individuals or companies can purchase a share of the aircraft. In fractional ownership, the owners share the costs of purchasing and maintaining the aircraft.

How to Obtain Aircraft Financing:

Determine Your Budget

Before you start looking for aircraft financing, you need to determine how much you can afford to spend on an aircraft. Consider the purchase price of the aircraft, as well as ongoing expenses like fuel, maintenance, and insurance. There are many other costs to financing an aircraft besides the purchase price of the aircraft itself. Resources like Stratos Jet Charters’ experts can help you get a more accurate cost estimate.

Research Lenders

Once you have determined your budget, you can start researching lenders. Look for lenders that specialize in aircraft financing and have experience in the aviation industry.

Prepare a Business Plan

If you’re purchasing an aircraft for commercial purposes, you’ll need to prepare a business plan that outlines your revenue projections and how you plan to use the aircraft.

Gather Your Financial Documents

To obtain financing, you’ll need to provide financial documents to the lender. Documentation that may be required can encompass tax returns, bank statements, and financial statements.

Submit Your Application

After you’ve gathered all the necessary documents, you can submit your application to your chosen lender. Contact the lender and provide them with the necessary documentation. Upon receiving your application, the lender will assess your eligibility based on their criteria. To increase your chances of approval, you should ensure that your application is complete and accurate.

Final Thoughts

Overall, aircraft financing is a complex process that requires careful consideration and planning. Working with experienced professionals can help ensure that the process goes smoothly and that you secure the best possible financing terms for your needs.