Aircraft Loan Types Explained
Understanding the different aircraft financing options available to you. Learn about conventional loans, SBA loans, and specialized aviation financing products.
Conventional Aircraft Loans
What Are Conventional Loans?
Conventional aircraft loans are the most common financing product available. These are direct loans from specialized aviation lenders that are not backed by government guarantees.
Advantages of Conventional Loans:
- ✓ Faster approval process
- ✓ Flexible terms and structures
- ✓ No government red tape
- ✓ Competitive interest rates
- ✓ Works with any aircraft type
SBA Aircraft Loans
Small Business Administration Loans
For business use aircraft, SBA loans offer government-backed financing with favorable terms. The SBA guarantees up to 75% of the loan, reducing lender risk.
SBA Loan Requirements:
- • Aircraft used for business purposes
- • U.S. citizen or permanent resident
- • Good credit score (typically 680+)
- • Personal guarantee required
- • Business plan documentation
Portfolio Loans
Portfolio Financing Programs
Portfolio loans are held by the lender rather than sold to secondary markets. This allows for more flexible underwriting and specialized terms for aviation.
Portfolio loans often feature competitive rates, longer terms, and more flexibility for unique situations like older aircraft or unusual use cases.
Lease Programs
Aircraft Leasing Options
For pilots who want to avoid ownership responsibilities, leasing provides access to aircraft with flexible terms.
Comparison Table
| Loan Type | Rates | Terms | Down Payment |
|---|---|---|---|
| Conventional | 4.0% - 8.5% | 10-20 years | 20-30% |
| SBA | 3.5% - 7.0% | Up to 25 years | 10-20% |
| Portfolio | 4.0% - 8.0% | 10-20 years | 15-25% |
Choosing the Right Loan Type
The best loan type depends on your situation:
- Personal use? Conventional loans offer speed and flexibility.
- Business use? SBA loans provide better rates and terms.
- Unique situation? Portfolio loans offer customized solutions.
- Want to avoid ownership? Consider leasing options.
Ready to Explore Your Financing Options?
Get pre-qualified today and discover which loan type works best for you.