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Is Your Aircraft Funding in Place?

Whether you’re thinking about buying your first aircraft, trading up or refinancing what you’ve already got, Alison Jones, Head of Aviation at Paragon, shares her top tips to make arranging finance as painless as possible…

AvBuyer   |   12th February 2018
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Arranging aircraft finance is a specialist business and, this year, Paragon becomes one of a small group of UK banks to enter and operate in the market. We believe that financing your aircraft should be simple and easy.

Long-established in the UK mortgage market where it has successfully operated for over 30 years, Paragon was awarded a banking licence in 2014. This significantly increased its lending capacity and means the bank is now able to branch out into a range of specialist finance markets traditionally under-served by the bigger banks.

Aircraft buyers need a finance specialist with in-depth asset expertise and comprehensive industry insight and our friendly and knowledgeable team will be able to help you every step of the way. Having funded more than 400 aircraft over the course of my career, I’m able to bring that expertise to Paragon and build a team with the capability to guide customers efficiently through the process and deliver a bespoke structure to suit each customer’s individual needs.


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

Paragon can provide finance on new and used piston aircraft, turboprops and corporate jets, as well as single and twin-engine helicopters in VIP, utility and EMS configuration. 

We work with high net worth individuals, small and mid-sized UK business and corporate customers to provide funding for aircraft that will be habitually based in the UK and Channel Islands.

Crucially, we need to know what type of aircraft you’re looking at and how you plan to use it. We can then provide a pre-approval to make sure you don’t lose the aircraft due to a lack of funding.

Usage and flying hours vary significantly depending on whether you’re planning to use your aircraft for hobby flying, as a charter or for utility purposes like film work or aerial survey. In fact, it’s this type of information that really lets us tailor the terms of the finance structure to meet your needs.

Whether you’re thinking about buying your first aircraft, trading up or refinancing what you’ve already got, Alison Jones, Head of Aviation at Paragon, shares her top tips to make arranging finance as painless as possible…

Our minimum finance amount is £100,000 and a typical structure will include a deposit, regular payments over a period of between one and seven years and a final balloon payment at the end.

However, depending on what type of aircraft you’re buying and how you want to use it, we can offer seasonal payments to match cash flow or other flexible terms.

If you need funding for specialist camera equipment, Paragon may also be able to help.

Finally, it’s worth bearing in mind that Paragon can offer finance on aircraft that are already mortgaged with other lenders, as well as providing finance to release equity on already owned aircraft for aircraft improvements, rebuilds or overhauls.

Set out your expected operating costs.

As well as setting your budget for the actual purchase, I’d recommend that you take some time to understand the operating costs of the aircraft.

This is important for two reasons.

First and foremost, your lender will want to see that you’re realistic about your operating 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 a good look at the costs before you buy can be critical.

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.

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

Build a support network with staying power.

A simple phone call or email is the first step in organising the finance you’ll need to get you airborne.

What’s striking though is the opportunity to become a lifelong partner for customers as they navigate their way through the aircraft buying journey – starting with a helicopter or piston aircraft and then on to a single or twin turbine – as their flying experience grows.

It’s something I’ve seen time and again, and it’s something that’s central to our approach here at Paragon.

It’s why we’ve built a flexible and competitive finance proposition - consulting with leading aircraft appraisers, law firms, insurers and tax advisors – to make sure we can tailor finance for a wide range of aircraft and use.

It’s also why we’ll always by happy for you to get in touch and talk through your requirements. We look forward to welcoming you on board!

 

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MI: www.paragonbank.co.uk

 

 


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