Owning a private jet is the ultimate luxury and convenience, and it is a huge status symbol. It offers the opportunity of discreet travel, exactly where and when you want, pretty much without restriction, without the stress of conventional commercial travel. Gone are the airport queues and delays and precious time is saved. So, if you have the finances or the resources, how do you go about financing your private jet in the United States? Let’s take a look further.
Key questions
Financing a private jet requires a significant investment and needs much research and careful consideration. A private jet can cost anything from $2 million to over $100 million. You should determine what aircraft suits your needs and your budget and why you actually need a private jet. You may want a new Gulfstream straight off the assembly line, or you might be happy with a pre-owned Cessna Citation X. It is a very individual choice. The key questions you should ask:
How many passengers will be traveling?
How often do you plan to fly?
Where do you plan to fly to?
What aircraft features are non-negotiable?
If you plan to fly less than 200 hours a year and do not wish to charter your private jet out, it is rarely worth the investment and charter or fractional ownership may be a better option. Buying a pre-owned aircraft is another consideration. Always get advice on the aircraft’s value and possible depreciation. The older the aircraft, the harder it will be to get finance.
What is your budget and how to finance an aircraft?
Of course, some people will pay cash for their aircraft, but others may require financing. There are a few different ways of doing this, including through a bank loan, through a private equity firm, or a leasing company. A strong financial analysis should take place to also take into account the aircraft operating costs and make sure that it is a viable option. Always research well and seek the advice of a professional aviation consultant. These are the primary ways of financing an aircraft:
Traditional loans – from banks or financial institutions where the aircraft is collateral
Asset-based loans – the loan is based on the aircraft’s value
Aircraft leases – where the lessor leases the aircraft back to the buyer
Photo: Gulfstream Aerospace
Seek professional advice There are several steps in the process of buying a private jet but you also have to consider regulations as well as finding the best deal. A specialist aviation consultant or private jet broker can help you determine your needs and help you find the best deal. They can also help with the minefield of regulations and advise on the leasing process, if appropriate. A specialist consultant will advise you on the financing process and deal with the contracts and paperwork involved. Commonly, they have a wide range of industry connections and will help you to make the best choices and find a better deal, whether it’s a new or pre-owned aircraft.
It is important to start discussions early and fully understand all costs and terms and conditions whether through your lender or via a consultant. Who will actually own the aircraft? This can have an impact on tax and financing. You can then decide on whether you wish to have a loan or lease and whether it is credit or asset-based. It is wise to get a few quotes from different lenders if going it alone and then negotiate a deal.
Photo Kambul | Wikimedia Commons
The final steps to a deal Finally, all financial and legal checks must be in place before you can finalize things. The lender will need information on you, your company (if appropriate), the aircraft and the purchase deal. They will need financial statements, tax returns, the purchase agreement and the pre-buy inspection report, which is an absolute must. They may also need a written appraisal.
Enlisting the help of an aviation attorney will ease the process as not only do they know all the financials but also any regulatory factors as well as any hidden factors like unreasonable lease terms or limits on flight hours.
Photo: Robert Buchel | Shutterstock
The rise of ownership
In 2024, there is still a strong interest from UHNWIs in buying their own aircraft instead of using commercial aviation. Jet prices have increased in turn and supply cannot meet demand. Since the pandemic, the number of people who want to own an aircraft has increased dramatically, as has private jet charter and fractional ownership. For those purchasing a new aircraft, the waiting time for delivery is two to three years and most manufacturers have a backlog.
Read More: How Does A Private Jet Fractional Ownership Program Work?
Photo: Airbus
Fast facts In a survey in October 2024 of US-based aviation financiers and private jet brokers commissioned by Airbus Corporate Jets found that:
84% expect the financing and leasing market to grow in the next two years
82% expect access to aircraft finance to increase
75% expect demand for operating leases to grow
91% expect finance rates to become more attractive
63% expect it will be easier to find finance for large jets
63% expect changes in aircraft valuations
“Aircraft financing is key to supporting growth in the business aviation sector. Our research suggests that the business aviation market is set to continue to expand and access to finance will become more available. In particular, as demand for larger business aircraft increases, it may become easier to secure financing against them.” Chadi Saade, President, Airbus Corporate Jets
Related: What You Need To Know About Private Jet Maintenance in The USA
How To Finance Your Private Jet In The USA
