Top 7 Mistakes to Avoid When Financing a Private Jet

Top 7 Mistakes to Avoid When Financing a Private Jet

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.

Comments

No comments yet. Why don’t you start the discussion?

Leave a Reply

Your email address will not be published. Required fields are marked *