Magic numbers

Unfortunately, financing could be a challenge. Once you get past 10,000 hours on a piston aircraft airframe, some lenders will start to get weak in the knees. We’ve known lenders who become hesitant with fewer hours than that. So, your financing options are going to become increasingly limited as you approach that 10,000-hour threshold.

This same hesitancy does not apply to turbine aircraft—turboprops or jets. Because of the rigorous tests those pressurized aircraft go through during their annual inspections, and the scheduled maintenance that goes into keeping them airworthy, lenders will be comfortable, potentially, doing deals on these types of airplanes with more than 10,000 airframe hours.

If you pursue financing on a high-time airframe, plan on structuring the deal differently. Expect a larger down payment. Expect the amortization to be much shorter than average. Expect a loan term that’s a lot shorter than normal. You’ll probably have a five-year balloon or shorter. Finally, don’t plan to achieve full amortization.

The bottom line is that aircraft ownership is not to be mythologized. Recognize that how the airplane will be used takes priority over the make and model with which you might become enamored. Flipping those priorities could lead you to make a mistake, a mistake you might have a hard time getting out of.

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