Aircraft financing: what lenders check before they lend

The short answer: aircraft financing usually means a loan secured by the aircraft, with 10% to 40% down depending on the aircraft and the loan structure, and an amortization period of 5 to 20 years. Before a lender funds it, the lender checks you (credit, liquidity and financials) and checks the aircraft: title and liens, logbooks, airworthiness directive compliance, damage history and value. This guide walks through each check so you can have the answers ready.

CRAFT is a Part 135 charter operator, not a lender. We manage records, inspections and compliance on our own Challengers every day, and an owner who finances an aircraft before putting it on our certificate through leaseback goes through these lender checks first. So this guide is written from the aircraft's side of the table.

How aircraft financing works

An aircraft loan works much like any secured loan. You pay a down payment, the lender lends the rest against the aircraft, and the lender records its security interest (a lien) with the FAA so it shows up against the aircraft's registration. You repay monthly over the amortization period. On larger aircraft the loan term is often shorter than the amortization, leaving a balloon payment to refinance or pay off at the end of the term. Textron Aviation notes it is most common to have a shorter term than amortization period.

Typical structures, as published by AOPA Aviation Finance:

Sources: AOPA Aviation Finance, piston aircraft, turbine and turboprop and jet purchases (February 1, 2025); checked October 11, 2026. Lenders set their own terms; these are typical ranges, not limits.

A credit-based loan leans on your income, liquidity and credit history, so it needs less equity. An asset-based loan leans on the aircraft's value, so it asks for more down. Leasing is the other route: the lessor keeps title and you pay to use the aircraft. We compare the two, and leaseback, in aircraft leasing: lease, buy or leaseback.

To see what a structure costs a month, use the aircraft loan calculator. It has example prices for more than 70 models from our ownership cost model and adds each model's operating cost for the total monthly cost of ownership.

What lenders check: you

The borrower side of underwriting is the familiar part. Expect the lender to ask for:

• Credit history and score. The lowest advertised rates go to the strongest credit profiles.
• Financial statements and tax returns. Textron Aviation lists three years of financials or tax returns on the business among typical credit requirements.
• Liquidity. Cash and marketable assets left after the down payment, because an aircraft keeps costing money after closing (see the fixed and variable costs on our ownership cost pages).
• Ownership experience. Lenders consider whether you have owned an aircraft before.
• The ownership structure. Many aircraft are bought through an LLC or a company. The lender will want to know who owns the borrowing entity and who guarantees the loan.

What lenders check: the aircraft

This is where an aircraft loan differs from most loans. The aircraft is the collateral, and its paperwork decides whether it is good collateral.

Title and liens

The lender needs to know nobody else has a claim on the aircraft. The FAA records bills of sale, mortgages, leases and liens against U.S.-registered aircraft under 14 CFR Part 49, and a buyer registers the aircraft with an AC Form 8050-1 application and an 8050-2 bill of sale. But the FAA states plainly that the Aircraft Registration Branch does not perform title searches. Lenders use an aircraft title and escrow company to search the FAA records, clear any old liens and file the new paperwork at closing.

Larger aircraft and engines also fall under the Cape Town Convention, and interests in them are registered on the International Registry. The FAA says eligible airframes include those type-certificated for at least 8 people including crew, helicopters for at least 5, and jet engines of at least 1,750 lb of thrust, with the FAA Civil Aviation Registry as the U.S. entry point (FAA, Cape Town Treaty). For a business jet, expect both an FAA filing and an International Registry registration.

Logbooks and maintenance records

An aircraft's value is in its records as much as its metal. 14 CFR 91.417 requires the owner to keep total time in service, the status of life-limited parts, time since overhaul, current inspection status and current airworthiness directive status, and those records must be transferred with the aircraft when it is sold. Missing logbooks, gaps in the history or unexplained repairs lower the value a lender will lend against, and can stop a loan.

Airworthiness directive compliance

Airworthiness directives (ADs) are the FAA's mandatory fixes for known unsafe conditions. They are legally enforceable rules, and operating an aircraft that doesn't meet an applicable AD is a violation (14 CFR 39.7). The lender, or the inspector it relies on, will want an AD compliance record showing each applicable AD and how and when it was complied with. An open recurring AD or an expensive one coming due changes what the aircraft is worth.

Damage history

A prior accident or significant damage doesn't always rule an aircraft out, but it affects value and insurability. AOPA's turbine purchase checklist describes lenders running background checks, damage history queries, and more before funding. Major repairs and alterations should be documented on FAA Form 337s in the records.

Pre-buy inspection

A pre-purchase inspection confirms the aircraft matches its records. AOPA recommends that a mechanic other than the aircraft's regular one do it, so the inspection is independent. On jets, the pre-buy is often done at a service center for the type, and its findings often become part of the price negotiation.

Value and loan-to-value

Lenders lend a share of the aircraft's value, not its price. J.P. Morgan lists valuation and loan-to-value ratios, along with aircraft age and loan size, among the terms it structures. Expect an independent appraisal or a lender's own valuation, informed by the records, hours, engine status and market data. If you're comparing prices, the UseRadar model pages and our ownership cost pages show typical values by model.

Engine programs

On turbine aircraft, engine overhauls are the largest single maintenance cost, and lenders want to know they're covered. AOPA Aviation Finance says most turbine lenders require an engine program, and Textron notes engine programs are often required on turbine aircraft. An aircraft enrolled in an hourly engine program is generally easier to finance and to sell.

Insurance

Before funding, the lender will ask to be named as loss payee on the hull policy, protected by a lienholder's endorsement, and AOPA notes lenders often require breach-of-warranty coverage for the amount of the loan. Insurance cost is one of the fixed costs on each ownership cost page.

What lenders check: how it will fly

Lenders want to know how the aircraft will be used: personal flying, business flying under Part 91, or charter under an operator's Part 135 certificate. AOPA Aviation Finance says Part 91 and Part 135 use are both acceptable for turbine loans. If the aircraft will fly charter, say so at the start: the lender's consent, the insurance and the lease to the operator need to line up. Our guide to Part 91 vs Part 135 explains the difference, and wet lease vs dry lease covers the leasing rules that come with it.

A lender's checklist, in one table

Rates, payments and lenders

Aircraft loan rates are priced off public benchmarks such as the prime rate and Treasury yields, plus a margin for the borrower, the aircraft and the term. Our aircraft loan rates page tracks the benchmarks monthly and lists rates lenders publish themselves, with their dates. For who lends on aircraft, see the aircraft lenders directory. And for jets specifically, private jet financing covers credit- versus asset-based loans, balloons and the tax points to raise with your adviser.

Here is what a loan costs a month for some popular aircraft, under the same example assumptions as the calculator:

Illustrations, not offers: 20% down, 15-year amortization at 7.00% (the U.S. bank prime rate, 7.00% on October 2, 2026 (Federal Reserve H.15), used only as an example rate). Example prices are the median of UseRadar's value data for each model; operating cost is our ownership cost model at 200 hours a year. Change any of it in the aircraft loan calculator.

Owning an aircraft that earns

A loan payment is only part of the monthly cost. Fixed costs such as crew, hangar and insurance continue whether the aircraft flies or not. One way owners offset them is to put the aircraft on a charter operator's certificate. In a CRAFT leaseback, a Challenger 300 or 350 you own flies charter on our Part 135 certificate between your trips, and we carry crew, maintenance and compliance. Lenders will want to see that arrangement, so it's worth raising early.

Sources

• AOPA Aviation Finance: piston aircraft, turbine and turboprop, exploring aircraft financing options for jet purchases (February 1, 2025)
• AOPA, turbine finance purchase and delivery checklist (May 2019)
• Textron Aviation, financing a private aircraft 101
• FAA, clear titles and Cape Town Treaty
• eCFR: 14 CFR 47.31, 49.31, 91.417, 39.3, 39.7
• J.P. Morgan Private Bank, aircraft financing

All checked October 11, 2026.