3 Ways to Finance Your Private Jet

Faced with crowded airports, security protocols, and ever-decreasing legroom, more and more people opt to purchase their private jets. But for many would-be private jet owners, the biggest obstacle isn’t the price tag — finding the right way to finance their purchase.

We’ll discuss every option available for financing a purchase of a private jet, from traditional loans to aircraft leases. But before that, let’s start with the basics.

How Much Does it Cost to Buy a Private Jet?

While the statement may seem ridiculous, buying a jet plane is similar to buying a car. The price of an aircraft depends on its age, whether it’s new or used, and performance specs, among numerous other factors. 

There are a few popular types of private jets, which we’ll outline below.

• Very Light Jets: Holds between 4 and 8 passengers and can stay in the air for up to 3 hours. These jets are priced between $1.4 and $5.5 million.
• Light Jets: A light jet can hold between 7 and 9 passengers. It also can have ld a bathroom or a small kitchen onboard. Light jets cost up to $6 million.
• Midsize Business Jets: As the name suggests, these jets are perfect for business travel and can hold up to 10 passengers. They cost between $10 and $20 million and work well for short and mid-range flights.

How to Find the Right Lender

Whether you’re applying for a traditional bank loan, an asset-based loan, or an aircraft lease, it’s important to shop around and compare offers from multiple lenders.

When comparing loans, be sure to look at:

• Reputation: Be sure to research the lender’s reputation before you apply. Use a website like Paydaysverige that gives you an overview of the lender, their rates, and reviews from other customers.
• Interest rates: Affects monthly payments and the overall loan costs. Look for lenders like Coop — https://paydaysverige.com/coop-lan/ — that offer loans with low-interest rates.
• Repayment terms: Shorter terms usually mean higher monthly payments, but you’ll pay less interest overall.
• Fees and charges: Certain lenders will charge you processing, closing, and origination fees. Others, like Klara Lan — https://paydaysverige.com/klara-lan/ — have programs with no hidden fees or charges.
• Loan terms: Shorter terms often have higher monthly payments; however, you’ll pay less in interest over the life of the loan.

3 Ways to Finance Private Jets

Before you start shopping for your private jet, you must know how you’ll finance the purchase. Here are three common financing options:

1. Traditional Loan

If you’re like most people – if you want to own a private jet, you’re probably not like your average person –  you probably finance all of your major purchases with bank loans. And if you choose to go this route, you’ll need a strong credit score and a healthy down payment to qualify.

Traditional loans can be structured for repayment periods of up to 20 years, but you’ll likely pay a higher interest rate than you would for other types of loans.

2. Asset-Based Loan

Another option is an asset-based loan, which lets you use the aircraft as collateral. This type of loan usually has a shorter repayment period than a traditional bank loan — often seven years or less.

While only a few organizations offer this type of loan, it comes with several perks, including:

• No financial disclosures: You don’t have to reveal your tax returns or other financial statements to the lender.
• No personal guarantee: You’re not liable for the loan, so your personal assets are protected if you can’t repay the debt.
• Flexible collateral: In addition to the aircraft, you can use other assets, such as real estate, to secure the loan

3. Aircraft Lease

If you’re not ready to commit to owning something as big as an actual airplane, you can always lease an aircraft instead. Leasing allows you to take private flights whenever you can, without the large upfront purchase cost.

Leasing also offers some advantages over owning, such as:

• Potentially lower payments: Lease payments are often lower than loan payments because you’re only paying for the use of the aircraft, not the entire price.
• More flexibility: Select a shorter term than the typical loan repayment term, so you can upgrade to a newer model when the lease is up.
• Tax benefits: In some cases, you may be able to deduct lease payments as a business expense.

Closing Thoughts

If you’re considering buying a private jet, financing is important. Traditional bank loans, asset-based loans, and aircraft leases are all popular financing options for private jet purchases.

When choosing a loan, compare interest rates, repayment terms, fees, and charges from multiple lenders. And be sure to research the lender’s reputation before you apply.

You can find the right financing solution for your private jet purchase by comparing your options.