November 2010 Issue
Aircraft Loans Market: Rates Never Better
Lenders are conservative on what they’ll finance and who they’ll lend to, but if you can jump the hurdles, the rates are terrific.
In 2003 when we looked at the aircraft loan market we said, "If rates go much lower, the money will be free." Well, they’re lower. And though the money isn’t free yet, it’s cheap to those who can qualify. The recent financial chaos means there’s no wink-wink, nudge-nudge approval, but it also means that the surviving lenders are looking for those qualified buyers. There’s less competition in the loan market and some big players, like Sovereign Bank, have pulled out. Reselling and securitization of loans isn’t the market it once was. This means a greater reliance on equity lending—borrowing against the value of the aircraft—and tougher standards for the borrower.
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