Aircraft financing in Canada generally works in a similar way to financing other types of assets. Here are some key points to consider:
1. Lenders: There are several lenders in Canada that offer aircraft financing, including banks, credit unions, and specialty finance companies.
2. Loan Types: Aircraft financing can be secured or unsecured. Secured loans use the aircraft as collateral, while unsecured loans do not. Interest rates for secured loans are generally lower than for unsecured loans.
3. Down Payment: A down payment is usually required for aircraft financing. The amount of the down payment can vary, but it is typically around 10-20% of the aircraft's purchase price.
4. Loan Term: The loan term for aircraft financing can range from a few years to several decades, depending on the lender and the type of loan. It's important to choose a loan term that fits your financial situation and aircraft ownership goals.
5. Creditworthiness: Lenders will consider your creditworthiness when determining whether to approve your loan application and what interest rate to offer you. Factors such as your credit score, income, and debt-to-income ratio will be taken into account.
6. Aircraft Evaluation: Lenders may require an independent appraisal of the aircraft to determine its value before approving a loan.
Insurance: Lenders may require you to have insurance coverage for the aircraft before approving your loan.
Overall, aircraft financing in Canada can be a complex process, and it's important to work with a lender who has experience in the aviation industry and can provide tailored solutions to meet your specific needs.
