What is the difference between commercial aircraft financing and purchasing

The New York Tribeca Group can assist company owners seeking financing for commercial aircraft acquisitions and financing. However, whether you should lease or purchase your jet remains an issue.

Financing

Aircraft purchases are expensive in and of themselves, but they become considerably more so when you consider that you may be acquiring a whole fleet. Because leases give more working capital, younger and less costly airlines favor them. More than a third of all commercial airplanes are leased today.

Working capital may be limited, as it is with airlines, to either acquiring a single jet or financing a fleet for a variety of reasons. Newer planes are also less likely to break down, and maintenance expenses are lower, lowering the danger of residual value. Because the lease is reported on the balance sheet, the lessee is often ineligible for aircraft tax depreciation deductions.

Purchasing

Purchasing a big number of planes may tie up a lot of cash and put a pressure on balance sheets, something many airlines cannot afford. Purchasing, on the other hand, raises collateral, decreases interest, and allows for the “sell and leaseback” method to be implemented.

A “sale and leaseback model” airline purchases planes, then sell them to leasing firms, who then lease them back to passengers. Because airlines can generally buy aircraft from manufacturers for cheaper money than leasing firms, this is the case.
Business studies show that the aircraft industry is thriving, regardless of your inclination. Travel has grown in lockstep with the economy, and millennials have changed their focus from materialism to experience, preferring travel and adventures over commodities and tangible possessions.

Passenger airlines, as well as freight and air mail, provide a sufficient market to offset rising oil prices and international taxes and tariffs.

Commercial Aircraft Financing Providers

It might be tough to locate a commercial aviation lender with adequate financial resources to provide you with the amount of cash you require. It may take a few applications, more collateral, or higher interest rates, but the choices listed below should be able to provide funding.

A loan for a small business
Banks, credit unions, and the Small Business Administration are all good places to look for financing. While these loans have better rates and conditions than those offered by conventional lenders, they are subject to government restrictions and strict financing criteria, making them difficult to get.

Line of credit
A line of credit is similar to a credit card in that it permits you to borrow more money. A business line of credit allows your firm to have rolling credit, which is a common option for leasing equipment that pays off fast, such as an airplane. A funder provides you with a credit limit that you may spend up to, and since you only spend what you need, you only pay interest on what you need. This is great for businesses who require irregular or constant cash flow and want more term flexibility than a loan can give.

Merchant cash advance
The merchant cash advance sector offers a variety of funding options, including debt consolidation, credit card splitting, and recurring funding for the purchase of future receivables. Alternative finance has lower restrictions and gives higher rates and shorter periods, allowing company owners who have been rejected down by banks to get operational cash. This would be ideal for a business with a large amount of debts and a need for cash as quickly as possible.

 Asset based financing

If you have equipment or inventory assets, this program may be suitable for you. Lenders prefer more liquid assets like cash (invoices, investments, purchase orders), but if collateralized assets are available, they will offer finance. Borrowers who have maxed their current credit limits and obligations with merchants and banks might use this alternative.

Get Consulting

The New York Tribeca Group offers aviation consultancy to businesses interested in exploring commercial aircraft financing options. Are you debating whether to lease or purchase? Call us and we’ll discuss your cash flow and overhead expenditures to determine what’s best for your business. Do you have a hard time deciding between 6 and 12 months? The financial specialists at the New York Tribeca Group are always happy to help you identify and acquire the best financing plan for your aircraft company expansion. Beyond commercial aircraft financing, the aviation industry has specific needs. NYTG can also fund the following areas of the sector:

• Airport expansion – We can help airport operators finance the addition of extra terminals, the purchase of other airports, and other construction projects.
•  Airline planning – When a company expands, it usually need a new logistical strategy and flying schedule. You can get financing to smooth out the shifting cash flow when expansion generates a ripple effect of adjustments.
• Staff hiring – Staffing — Pilots, flight attendants, maintenance crews, and ticketing employees will be required for every plane leased. We can renew your funding with us to help with the additional costs of hiring and training new employees for your plans when your firm needs funding to cover the initial costs of hiring and training new personnel for your plans.
• Equipment upgrades and repairs –Upgrades and repairs to equipment — Whether you lease or buy, aircrafts require regular maintenance to be in compliance with regulations. With New York Tribeca Group as your financial partner, you won’t have to worry about maintaining your new fleet.
• Helicopters and other aircraft – Financing is available for every type of aircraft, not just planes and helicopters. Do you have a one-of-a-kind aviation business that need funding? We’ll do our best to tailor a program to your company’s needs.
• And there’s more!

The New York Tribeca Group offers aviation consultancy to clients interested in discussing commercial aircraft financing options. Trying to decide whether to lease or buy? Call us and we’ll discuss your cash flow and overhead costs to determine what’s best for your business. Do you have a hard time deciding whether to go with 6 or 12 months? The finance specialists at the New York Tribeca Group are always happy to assist you in locating and getting the best financing plan for the expansion of your aircraft company. The needs of the aviation sector extend beyond commercial aircraft finance. NYTG can also fund the following elements of the industry: