IADA white paper says aircraft financing has become a strategic buying tool

IADA’s latest white paper says business aircraft buyers now need to think about financing as part of the acquisition strategy, not just a back-office step. The report draws on aircraft finance leaders from PNC, JSSI, First American Equipment Finance and Global Jet Capital to show how rates, structure, asset values and lender type can shape ownership outcomes.

Why it matters: - Business aircraft financing now affects capital allocation, ownership flexibility, risk management and long-term aircraft value. - Buyers face a more complex market with dynamic aircraft values, constrained inventory, sophisticated ownership structures and a wider set of capital options. - The white paper argues that choosing the right financing structure can matter as much as choosing the aircraft.

What happened: - IADA published a white paper built around a panel discussion with four aircraft finance leaders. - Mesinger Jet Sales Vice President Josh Mesinger moderated the discussion. - The panel included Patrick Gentile of PNC Financial Services Group, Ben Hockenberg of JSSI, Sarah Yarnes of First American Equipment Finance and Mike Christie of Global Jet Capital. - The discussion focused on how buyers should approach business aircraft financing in today’s market.

The details: - The panel said there is no universal financing solution for every aircraft acquisition. - Financing depends on the aircraft, the buyer’s financial profile, the mission, the operating jurisdiction and the owner’s long-term goals. - Mesinger said prices are moving differently across aircraft types, with some rising, some flat and some declining. - Gentile said PNC offers traditional credit-based lending and asset-based structures, including non-recourse, no-financial-disclosure loans. - Gentile pointed to persistent inflation, a strong labor market and energy-price pressure as reasons rates could stay elevated. - Gentile said the market is more likely to see higher rates than lower rates over the next 12 months. - Gentile said current aircraft financing rates generally run from the high 4% range for investment-grade opportunities to the mid-6% range for more specialized structures. - Gentile said PNC’s higher-rate structures reflect its asset-based, limited non-recourse program. - Gentile also said lenders add value by helping clients understand market conditions and financing risks. - Hockenberg said the market has largely looked through geopolitical events and still feels constructive. - Hockenberg said strong demand continues from ultra-high-net-worth individuals, corporations and fleet operators. - Hockenberg said late-model aircraft face inventory constraints and OEM backlogs remain elevated. - Hockenberg said some aircraft now command premiums that would have seemed extraordinary a few years ago, while others still depreciate more traditionally. - Hockenberg said JSSI Aviation Capital’s asset-based model starts with the aircraft itself, not just the borrower. - Hockenberg said aircraft age, production status, utilization, maintenance pedigree, demand and resale prospects all affect structure. - Hockenberg said there are 150 different platforms in business aviation, so one loan-to-value lens cannot fit the whole market. - Hockenberg said the approach supports loans, leases, bridge financing, progress-payment financing and cross-border structures. - Yarnes said First American Equipment Finance centers underwriting on sponsor quality. - Yarnes said the bank evaluates liquidity, leverage, cash flow and overall financial strength. - Yarnes said high-net-worth clients continue to acquire assets because their portfolios are still performing. - Yarnes said the pandemic and the correction that followed forced tough conversations about loan-to-value covenants and added equity needs. - Christie said Global Jet Capital treats aircraft as long-term equity investments. - Christie said leasing companies must assess credit risk and asset risk at the same time. - Christie said leasing can turn aircraft ownership into an expense while helping clients plan regular fleet replacement. - Christie said cross-border transactions often require legal, tax and regulatory expertise. - The panel said interest rates alone do not determine financing value. - Hockenberg said structure is the other half of the picture beyond rates. - The discussion said loan-to-value ratios, amortization, balloon payments, residual assumptions, utilization and ownership structures all affect long-term economics. - Mesinger said buyers may need to move quickly when the right aircraft becomes available. - The white paper said prepared buyers often line up financing conversations, preliminary approvals and structure options before identifying an aircraft.

Between the lines: - The report frames aircraft finance as a competitive advantage, not just a funding decision. - Specialized lenders appear to be gaining relevance as aircraft markets fragment by platform, age and mission profile. - The emphasis on structure suggests many buyers can improve outcomes by focusing on total ownership economics instead of headline rate alone.

What's next: - Buyers and advisors are likely to put more weight on lender selection, structure design and preapproval readiness. - The white paper suggests the strongest transactions will be the ones where financing is planned before the aircraft is found. - As inventory stays tight in parts of the market, speed and financing preparedness may become even more important.

The bottom line: - IADA’s message is simple: in business aviation, financing is now part of the strategy, not an afterthought.