Financing an aircraft is not like financing a car, and the difference is not the amount. It is that most lenders simply do not write them. Aircraft are unfamiliar security, the market is small, and a lender with no experience in it has no way to value one. So the question is less about your application and more about whether the lender takes aircraft at all.
What this covers
Recreational and ultralight aircraft: light sport aircraft, ultralights registered with the relevant recreational aviation body, gliders and motor gliders, and similar aircraft flown privately.
General aviation aircraft, commercial operations and helicopters are a different market with specialist lenders and different requirements. If that is what you are buying, it is worth going to someone who works in that space specifically.
Secured or unsecured
A secured loan against the aircraft is possible where the lender is comfortable with the asset, which is where the narrow panel matters. The aircraft is identifiable by registration and serial number, which helps, but valuation is the harder part because the market is thin and comparable sales are few.
An unsecured personal loan is often the practical route, particularly for lower-value ultralights or where a lender will not take the aircraft as security. It is priced for the higher risk, and for many buyers it is the difference between the purchase happening and not. Our personal loans page covers both, and our guide to secured loans explains how security changes what you are offered.
Registration category matters
How the aircraft is registered shapes both the purchase and the lender's view. Recreational registration, VH registration and experimental or amateur-built categories carry different rules about who may fly the aircraft, what maintenance is required and who may perform it.
For finance purposes the practical points are that the aircraft must be identifiable and transferable, and that amateur-built and experimental aircraft are harder, because resale is narrower and the build quality depends on who did it. A professionally built aircraft with complete documentation is a materially easier proposition than a home-built one, even where both fly perfectly well.
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Logbooks are the asset's paperwork
On an aircraft, the logbooks are close to being part of the asset. Airframe, engine and propeller hours, maintenance history, airworthiness documentation and any modifications should all be present and complete.
Incomplete logbooks reduce what an aircraft is worth and make it far harder to finance, because neither you nor a lender can establish what condition it is in. If you are buying and the paperwork is patchy, treat that as a pricing issue and a finance issue, not an administrative one.
Engine hours against time between overhauls deserve particular attention. An engine approaching overhaul carries a large cost that lands on the new owner, in the same way a major inspection does on a crane. Factor it into the price and raise it when arranging finance.
Buying privately
Most light aircraft change hands privately. Search the Personal Property Securities Register against the aircraft's serial number before you pay, at ppsr.gov.au. Aircraft are commonly financed and the register covers them; if money is owing and is not paid out at settlement, the lender's interest follows the aircraft to you.
Where the purchase is financed, the lender verifies the seller and pays them directly, which protects both sides. A pre-purchase inspection by an appropriately qualified person is standard practice and worth doing regardless of how the purchase is funded.
The costs that come with it
Worth budgeting before you commit, because they affect whether the repayment is comfortable:
- Hangarage or tie-down, which varies enormously by airfield
- Insurance, priced on the aircraft, your hours and your ratings, and generally required by a lender where the loan is secured
- Annual inspections and maintenance, including the overhaul reserve above
- Ongoing registration and membership with the relevant body
What lenders assess
- Income and employment, and whether the repayment fits alongside existing commitments
- Your credit file, including recent applications
- The aircraft, where it is being taken as security: type, hours, condition, documentation and registration category
- Any deposit, which matters more than usual here because it reduces the lender's exposure on unfamiliar security
Where a broker fits
With aircraft the work is almost entirely in the matching. Most lenders decline before looking, so knowing which will consider one, and whether secured or unsecured is the realistic structure for the aircraft in question, is the difference between a settled purchase and a file full of declines. Our personal loans page sets out what we arrange, Australia-wide.
This article is general information only and is not financial or legal advice. Aircraft registration, maintenance and operating requirements are set by the relevant aviation authorities. Lender criteria vary and change.
Damo Treadgold is the director of Treadgold Finance, an FBAA-accredited finance broker on the Sunshine Coast, arranging personal, car, boat and equipment finance Australia-wide.
Frequently Asked Questions
Can you finance a recreational or ultralight aircraft?
Yes, though the lender panel is narrow because most lenders do not write aircraft at all. Depending on the aircraft it may be financed secured against the aircraft, or through an unsecured personal loan.
Why will so few lenders finance an aircraft?
Unfamiliar security, a thin resale market and few comparable sales make valuation difficult. It is rarely about the applicant and usually about whether the lender takes aircraft as an asset class.
Are amateur-built or experimental aircraft harder to finance?
Yes. Resale is narrower and build quality depends on who built it, so fewer lenders will take one as security even where it flies perfectly well. Complete documentation helps considerably.
Why do logbooks matter so much?
Airframe, engine and propeller hours and maintenance history establish the aircraft's condition and value. Incomplete logbooks reduce what it is worth and make finance much harder to arrange.
What about an engine near overhaul?
That cost lands on the new owner, so factor it into the purchase price and raise it when arranging finance rather than discovering it afterwards.
Do you finance general aviation aircraft or helicopters?
Those are a different market with specialist lenders and requirements. This covers recreational and ultralight aircraft.
