Turbine loan timing
Be prepared to be astonished
First, the speed, the complexity, and the capability of turbine aircraft compared to piston-powered aircraft is unmatched. Second, the complexity and expense of the acquisition and insuring process can be jolting. Most folks are aware of the first reason, but some are surprised by the second.
That’s especially true if the buyer is used to buying piston aircraft with a hefty down payment and the paperwork in excellent order. More than one customer of ours initially purchased a Cirrus SR22 and then stepped into the Vision Jet. Same company, so same loan procedure, yes? No.
There are significant differences between acquiring a $250,000 loan and a $2 million loan, and what determines those differences comes down to lender policy and authority. In other words, over a certain monetary threshold, the number of people who cast a critical eye on your loan package increases.
Bottom line? More eyeballs mean more time taken to process the loan.Every lender has different policies regarding loan signoffs. Some require the head of credit to shepherd the process, while others simply require a credit analyst. Some loans may need to go to the credit committee. Others need to go all the way to the board.
Typically, smaller lenders are going to have lower thresholds at which point the higher dollar loans are escalated for additional signoffs.
Bottom line? More eyeballs mean more time taken to process the loan.
And if you’re easing into the $3-million-plus range, and you haven’t talked to your insurance broker yet, be prepared to be astonished.
Once you get to that $2 million or $3 million threshold, things—like the aircraft—get complicated. Our advice? Look into insurance early in the purchasing process to avoid any surprises.
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