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Aviation Finance

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Aviation Finance

Clifton private finance

We specialise in sourcing high value aviation finance in the UK and internationally for all types of aircraft, personal or otherwise

 

High quality aviation finance solutions for UK & international clients.

  • Finance from £25,000
  • Competitive aircraft finance that often outperforms dealer offers
  • Flexible finance options which includes: Personal loans, Personal contract Purchase (PCP), Hire Purchase, Lease Purchase
  • Tailored bespoke service
  • Refinance options
  • Flexible repayment periods
  • Finance available on new, used and auction bought aircraft
  • Business owners - Refinance existing assets to free up your company's liquid capital
  • Business owners - Cashflow matched repayments
  • Asset finance for aircraft

We can deliver enhanced, bespoke or exclusive terms through our market knowledge.  

Call us on 0203 900 4322 to discuss your requirements.

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Aviation Finance

Purchasing an aircraft is a major financial decision that requires careful consideration. The purchase price alone can be quite substantial depending on the type, age and condition of the aircraft. In addition to the initial outlay, owning and operating an aircraft involves significant ongoing expenses such as maintenance, insurance, storage and crew costs.

For many individuals and businesses, paying the full purchase price upfront is simply not feasible. This is where aviation financing can provide a valuable solution. By securing financing, buyers can spread out the cost of the aircraft over time through a loan or lease. This improves cash flow and makes aircraft ownership more accessible and affordable.

There are several financing options to choose from, each with their own pros and cons. Loans allow you to borrow money to directly purchase the aircraft, while leases allow you to pay a monthly fee to operate it without taking full ownership.

With our help, you can explore your best option based on factors like tax implications, financial goals, and future plans for the aircraft.

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The Different Finance Options Available for an Aircraft 

If you want to buy an aircraft in the UK, you have several finance options to choose from. Each option has its own features, advantages, and disadvantages. Depending on your personal and financial circumstances, you can choose the one that suits you best:

Aviation Finance

Aviation finance is a form of leasing, where you pay a monthly fee to use the aircraft, but you do not own it. The monthly fee is based on the depreciation of the aircraft over the lease term, and the residual value at the end of the lease. The residual value is the estimated value of the aircraft at the end of the lease, which is agreed upon at the start of the contract.

The advantage of aviation finance is that you can enjoy flying a new aircraft without having to pay the full purchase price upfront. You also have lower monthly payments than other finance options, as you are only paying for the depreciation of the aircraft.

At the end of the lease, you have three options, you can either:

Aircraft Loan

An aircraft loan is a form of credit, where you pay a deposit and then monthly instalments to buy the aircraft over a fixed period of time. The monthly instalments include both the principal and the interest, and the interest rate is usually fixed. The aircraft is the security for the loan, which means that if you fail to make the payments, the lender can repossess the aircraft. This is similar to hire purchase, which is a type of asset finance that allows you to own the asset at the end of the contract, after paying a final option to purchase fee.

The advantage of an aircraft loan is that you can own the aircraft at the end of the contract, and you can choose the deposit and the duration of the contract to suit your budget. You also have the option to settle the loan early, by paying the outstanding balance and a small fee. The disadvantage is that you have to pay interest on the loan, and you do not own the aircraft until you make the final payment.

The final payment is usually the same as the monthly instalment, plus a £10 option to purchase fee. This fee is a legal requirement, and it transfers the ownership of the aircraft from the lender to you.

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Aircraft loans and aviation finance may have some differences from hire purchase and asset finance, such as:

Please note that these are general guidelines and the specifics can vary based on the lender’s policies and the aviation regulations in your country. Always consult with a financial advisor or legal expert before making any decisions

Additional Aviation Finance Options

Hire Purchase with Balloon Payment

Hire purchase with balloon payment is similar to an aircraft loan, but with a twist. Instead of paying equal monthly instalments, you pay lower monthly instalments and a larger final payment, known as the balloon payment. The balloon payment is usually 25% to 50% of the purchase price of the aircraft, and it is agreed upon at the start of the contract.

The advantage of hire purchase with balloon payment is that you can have lower monthly payments than an aircraft loan, and still own the aircraft at the end of the contract. You also have the option to refinance the balloon payment, or trade in the aircraft for a new one.

The disadvantage is that you have to pay more interest than an aircraft loan, and you have to save up for the balloon payment or find another source of finance. The balloon payment is usually the same as the agreed percentage of the purchase price, plus the nominal fee that is added to the final payment. This fee is a legal requirement, and it transfers the ownership of the aircraft from the lender to you.

Contract Purchase

Contract purchase is a leasing option, where you pay a deposit and monthly instalments, based on the depreciation and the residual value of the aircraft. You do not own the aircraft, but you can buy it for the residual value, return it, or part-exchange it at the end of the contract.

Contract purchase has lower monthly payments and less upfront cost than other finance options, but no equity and possible extra charges for exceeding usage limit, or any damage or wear and tear.

At the end of the contract, you have three options. You can either buy the aircraft for the residual value, return it to the lender and walk away, or part-exchange it for a new one or use any equity as a deposit.

Personal Contract Purchase (PCP)

PCP is a flexible leasing option, where you pay an initial payment and lower monthly instalments, based on the depreciation and the residual value of the aircraft. You can own, return, or part-exchange the aircraft at the end of the contract, by paying, avoiding, or using the residual value as a deposit. PCP has lower monthly payments and more options than contract purchase, but higher interest and a large final payment.

Popular Models of Private Jets you can Buy on Finance

Now that you understand the different ways to finance an aircraft in the UK, you might be wondering what types of private jets you can buy on finance. The good news is that you can find almost any model of private jet on finance, as long as it is within your budget and meets the lender’s criteria.

However, some models are more popular and available than others, depending on the demand, supply, and market trends. Here’s a brief overview:

Table

Model

Description

Price Range (£)

Estimated Monthly Payment (£)

Piper PA32RT-300

A single-engine aircraft known for its reliability and performance. It’s a popular choice for both personal use and flight training.

£90,000

Varies based on terms of the loan

Gobosh G700S

A light sport aircraft that’s easy to handle and maintain, making it a great choice for new pilots or those looking for a cost-effective option.

£62,000

Varies based on terms of the loan

Cessna Citation CJ3

A light business jet that is known for its speed and range. It’s a popular choice for business travel.

£4,000,000

Varies based on terms of the loan

Embraer Phenom 300

A light jet that offers a balance of comfort, performance, and operating cost. It’s often used for both personal travel and business purposes.

£6,000,000

Varies based on terms of the loan

Bombardier Challenger 350

A super-midsize business jet known for its wide cabin and smooth ride. It’s a popular choice for long-range travel.

£16,000,000

Varies based on terms of the loan

Gulfstream G550

An ultra-long-range business jet known for its range, speed, and luxurious interior. It’s often used for transcontinental flights.

£33,000,000

Varies based on terms of the loan

Additional Costs of Owning an Aircraft

Owning an aircraft can be a significant financial commitment, so you should carefully plan your budget and compare the different finance options available. You should also consult with a professional aircraft broker, who can help you find the best aircraft for your needs and negotiate the best deal for you.

At Clifton Private Finance we can help. With over 20 years of experience and access to exclusive lenders and rates, we’ll offer you expert advice, tailored solutions, and a hassle-free service. Contact them today and get your dream aircraft on finance.

Besides the purchase price and the finance cost, you should also consider the costs of owning and operating an aircraft, which can vary depending on the size, type, and condition of the aircraft. Some of the main costs include:

Importantly, these are general guidelines and examples. When it comes to your own aviation financa and the costs involved, the specifics will vary based on the aircraft’s specifications and the aviation regulations in your country. Always consult with a financial advisor, such as us at Clifton Private Finance, or a legal expert before making any decisions. 

What Happens at the End of an Aviation Finance Plan?

Aviation finance is a type of finance that allows you to use the aircraft as an asset for your business or personal use, while paying a fixed monthly fee to the lender. Aviation finance can be either a finance lease or an operating lease, depending on whether you want to own the aircraft at the end of the term or return it to the lender.

At the end of an aviation finance plan, you have different options depending on the type of lease you have chosen. Here are the possible scenarios:

The option that you choose will depend on your preferences and circumstances. For example, if you want to own the aircraft at the end of the term, you might prefer a finance lease. If you want to have a newer and more efficient aircraft, you might prefer an operating lease.

Using a Finance Broker to Help

If you are interested in financing an aircraft in the UK, you might want to consider using a finance broker to help you with the process. A finance broker can help you find the best aviation finance option for your needs and budget, as well as negotiate the best deal with the lender. A finance broker can also advise you on the different types of aviation finance available for buying an aircraft, such as flexible terms, low deposits, and bespoke solutions.

At Clifton Private Finance, we have a team of specialist finance brokers who can help you finance an aircraft in the UK. We can work with aircraft manufacturers and dealers to arrange your aircraft finance plan and finalise your purchase. We can also help you finance new, used, or auction-bought aircrafts, and offer the most competitive aviation finance service for you.

To find out more about our finance broker service, don’t hesitate to contact us today.

We offer a free and no-obligation telephone consultation at a time that suits you.

Get Asset Finance »

Call us today to discuss your requirements on 0203 900 4322


 

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