1. Not Understanding the True Cost
It’s not just the loan—you’ll need to budget for:
- Maintenance
- Insurance
- Pilot and crew
- Hangar fees
- Fuel and operational costs
Always plan for total cost of ownership.
2. Ignoring Depreciation
Private jets lose value over time. Don’t assume you’ll sell at a profit. Structure your loan to reflect the declining value.
3. Choosing the Wrong Lender
Some lenders specialize in aviation and offer better rates, flexibility, and understanding of aircraft value. Don’t just go with your usual bank.
4. Underestimating Documentation Requirements
Private jet loans require extensive paperwork:
- Business financials
- Proof of insurance
- FAA registration
- Pre-buy inspections
Prepare these early to avoid delays.
5. Overlooking Tax Implications
Depending on how and where you use the jet, it may be partially tax-deductible. Consult a tax advisor to maximize savings and avoid red flags.
6. Not Having a Clear Use Plan
Lenders prefer borrowers with a clear flight plan—how often and for what purpose the jet will be used. A vague usage plan may raise red flags.
7. Skipping Pre-Purchase Inspections
Especially for used jets, always invest in a comprehensive inspection. This protects you from buying an aircraft with hidden issues or costly repairs.
Final Thoughts
Financing a private jet is a complex but rewarding decision. Avoid these common pitfalls, work with aviation finance professionals, and treat the jet like the high-value asset it is. Smart financing starts with due diligence and ends with smooth takeoffs.
Leave a Reply