Thinking of financing a helicopter? Here are a few facts to know:
- Financing for helicopters is a much smaller niche than fixed-wing aircraft financing. Fewer lenders finance rotary aircraft, but there are some excellent financing options.
- Understanding the aircraft mission is critical for financing, as different lenders finance different missions.
- There are aircraft financing options for personal use, business use, essential use (working helicopters, such as those doing utility work or firefighting), touring, and even flight school leaseback.
- The age of the aircraft and the time remaining on the life-limited components is a significant factor for lenders, especially with Robinson helicopters, such as the R22, R44, and R66.
Aircraft Financing Options for Helicopters
Because helicopter loans is a niche market, it’s best to work with an aircraft financing broker such as The Aircraft Lenders to find the best rates and terms for your mission. Here are a few possible financing structures that are available:
- Personal or Business use helicopters—Part 91 use: These loans typically offer 80% loan-to-value or loan-to-cost (whichever is less). Terms can be five to 10 years, with 15-20 year possible amortizations possible helicopters: These loans typically offer 75%—80% loan-to-value or loan-to-cost. 5-year terms with up to 15-year amortizations are possible.
- Flight school leaseback – this is a small lending niche, but there are some excellent options
- Age is a significant factor – for helicopters older than 20 years old, there are fewer lending choices.
- Robinson helicopters are in a category of their own, as they have a 2200-hour total rebuild required, so where they are in that life cycle is a significant factor in whether a lender will consider loaning on them and how long a term and amortization they will offer
Helicopter Loans and Leases
Term loans:
- With term loans, the buyer takes title to the aircraft. The loan structure is similar to a mortgage, except the term and amortization are generally lower.
- Fixed-rate and floating-rate loan options are available.
- 75% – 80% loan-to-value or loan-to-cost is the norm.
Leases — Leasing a helicopter or fixed-wing aircraft:
- Operating leases, in which the owner rents the helicopter to you for a fixed payment and period
- Finance leases generally offer 100% financing and may provide a lease-to-purchase structure. These are typically reserved for businesses.
- Leaseback, in which the lender owns the aircraft and leases it back to you, with options to purchase at the end of the lease. These are also generally reserved for businesses.
Aircraft Financing Requirements
What’s required to finance an aircraft? Aircraft loans and leases for both helicopters and fixed-wing aircraft generally require a complete financial package, which means:
- 2-3 years of Tax Returns, both business and personal
- A Personal Financial Statement
- Bank statements to back up your liquid holdings
- A completed application
- A debt schedule for your business, if applicable
- Good credit – ideally a credit score over 700 and a comparable borrowing history (lenders want to see that you have made timely payments on installment loans of comparable size)
Airplane Financing Rates
Rates for financing are generally a little higher than they are for fixed-wing aircraft. Using a reputable broker such as The Aircraft Lenders can help get you the best rates and terms. Contact us at info@theaircraftlenders.com or 1-973-577-4226.
