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A beginner’s guide to buying a plane or helicopter

Alison Jones, Head of the Aviation Finance team at Paragon, has 15 years’ experience in the aircraft financing business and shares her top tips to help you get your aircraft dreams off the ground:

Alison Jones and Airplanes

Purchasing an aircraft can be a daunting experience I have financed more than 400 General Aviation (GA) and Business Aviation (BA) aircraft in my career to many clients. Some have learned to fly as a hobby, while other clients have been using the aircraft for flying schools, aerial surveillance, filming and business.

Whichever of these you may be, the types of questions you need to ask yourself will be the same.

1. Decide which aircraft you want and how you plan to use it.

When I first talk to clients about aircraft financing, I need to know what type of aircraft they’re looking at and how they plan to use it. The reason for that is because usage and flying hours vary significantly depending on whether they’re planning to use the aircraft for hobby flying, or as a charter or for utility purposes like lifting or aerial surveillance.

In fact, it’s this type of information that allows lenders to tailor the terms of the finance structure to meet the customer’s needs. Consider getting pre-approved for finance to make sure you don’t miss out on an aircraft due to lack of funding.

2. Set out your expected operating costs

On top of setting your budget for the actual purchase, the most sensible thing you can do is to take time to understand the operating costs of the aircraft.

The operating costs are vital for anyone looking to buy an aircraft. It’s important to remember that even if an aircraft doesn’t fly, there are still costs associated to owning an aircraft.

First and foremost, your lender will want to see that you’re realistic about these costs so that they can be sure you’ve thought through all the important issues around repayment, usage, insurance and maintenance.

However, if you’re planning to use your aircraft for business use, there is a second reason why it can be critical to take a good look at the costs before you buy. If you have a multi-site business spread across the UK, or even Europe, aviation can literally transform your operating model.

The ability to reach multiple sites in one day can significantly raise your productivity and free up time and money to use elsewhere in the business. Quantifying costs and benefits up front, might give you confidence to invest more in a higher performance aircraft at the outset.

3. Schedule a pre-purchase inspection

I highly recommend a pre-purchase inspection by an independent third party to avoid any surprises once you’ve taken ownership of the aircraft.

There’s a range of providers with the expertise to undertake an inspection and while there is a cost attached, a pre-purchase inspection has the potential to save you thousands of pounds.

>An inspection might pick up accident damage or maintenance that’s behind schedule, allowing you to renegotiate or even look elsewhere.

4. Seek out a specialist

Arranging aircraft finance is a specialist business and there are only a small group of UK banks that operate in this market.

To make the process as easy as possible, you need someone with in-depth asset expertise, comprehensive industry insight, the ability to guide you efficiently through the process and deliver a bespoke structure to suit your individual needs.

A specialist funder will be able to look at a variety of flexible and competitive finance options that range from seasonal payments that match your cash flow to regular payments with a final balloon payment at the end.

Talk to our specialist Aviation Finance team today and discover the best aircraft funding solution for you.

06 August 2018

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551