A: In general, most aircraft loans come with a personal guarantee. That’s a standard practice because in almost all lending scenarios, an individual must be personally financially responsible for the aircraft, regardless of whether the business entity will be the actual titleholder.
Some of the reasoning behind this requirement comes from lots of real-world experience. AOPA can vouch for the fact that many small-business owners tend to be owner-operators of their company airplane. And the line between business and personal use occasionally gets blurred. Just as sometimes the company car is used to run personal errands, lenders know that sometimes the company airplane is used for personal travel. Therefore, a lender is going to want to know that the business owner is a financially responsible person. Hence, submission of your personal financials is part of the financing process.
That said, there are situations involving a publicly held corporation or where the people for whom the airplane’s use is intended are neither owners nor significant owners of the corporation. Would they still be on the hook for the airplane? No. In that instance, though, the financials of the company will need to be verified by a CPA and show significant and consistent earnings.
In certain aircraft transaction scenarios, an asset-based loan may also be available, which avoids the need for personal financial statements to accompany the loan paperwork. The financing options for those are more limited, though, and they tend to cost a little more comparatively, so having a conversation with experienced advisers like AOPA Finance will provide valuable insight.