LIMITED RECOURSE & COLLATERAL BASED FINANCING

Most aircraft financing programs are credit based, meaning the borrower or guarantor's credit is the main determining factor in the loan decision. However, some lenders offer collateral based lending programs in which the asset value of the aircraft being financed is the primary metric used in making a loan decision. Rates are slightly higher with collateral based programs but they offer the borrower an option to obtain financing without providing a guarantee. Often the lender will not offer the highest loan to value in collateral based transactions but each transaction is viewed differently and is subject to the lender's comfort level.

On limited Recourse loans, it is the borrower's obligation to properly maintain the aircraft according to the lender's contract (i.e. a professional airframe and engine maintenance program acceptable to the lender may be required) and the borrower must maintain adequate insurance coverage as specified by the lender.

Characteristics of this loan type include:

Efficient and timely turnaround on proposals, approval and funding.
Both new and used aircraft can be financed under asset-based lending. However, longer terms and amortizations are available for newer aircraft.
Up to 85% financing.
For Jets, the age of the aircraft must be 15 years old or newer.
Corporate and charter aircraft operators are accepted, as well as general aviation aircraft.
Medium and Long Range aircraft can be based worldwide (with some country restrictions).

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