Nothing beats the unique experience of flying. If you are a pilot in search of the ideal aircraft, you should take action. One way of doing that is seeking a convenient financing solution that is suitable for your budget and personal specifications.
But how can you obtain aircraft financing?
Since such a purchase is an important decision, you should establish the type of aircraft you need, and the sum you can afford. Evaluating the interest rate, additional penalties that may apply, and extra fees are also necessary steps one should take.
- Based on research, the next five years are thought to bring a considerable increase in aircraft financing requirements. That is because this industry has been experiencing consistent growth.
- The increase of new participants, particularly from the U.S. and Australia, can maintain the strength, diversity, and balance in the aircraft market.
- On 26 May 2015, the Cape Town Convention was adopted, an international convention whose purpose is the simplification of international travel.
Advantages for the Aviation Industry in Australia
We could think of a handful of benefits associated with the Cape Town Convention. The immediate effects would include that Australian airlines have access to fee discounts from international agencies, in the event of aircraft purchasing. What is more, Australian airlines can obtain cheaper financing solutions.
Establish a Realistic Budget
Even though owning an aircraft is extremely exciting, it is a pricey investment. That’s why you should begin by evaluating the costs linked to owning such a piece of equipment. Expenses such as maintenance, insurance, storage and fuel costs should be taken into account.
Evaluate the Terms of the Loan
Make sure that you carefully assess the events of default section which will eventually dictate the circumstances in which the finance provider can terminate the loan. It’s quintessential to scrutinise the loan terms presents in the contract to be aware of the legal agreement you’re entering. For instance, many loan terms imply penalties in the event of early payment. What is more, getting a favourable interest rate with the lowest monthly costs should remain a priority.
Generally speaking, stamp duty isn’t payable if the aircraft is not physically present in Australia when the date of documentation is executed. Also note that transfer duty or conveyance is necessary on the sale, while it’s true that some exceptions may apply in certain scenarios.
At the moment, NSW is the only state that requires mortgage duty. So, remember to take this into account. Still, note that this tax won’t be imposed if the aircraft isn’t physically situated in NSW when the documents are signed. Therefore, the rule above still applies.
We consider that you should discuss this issue with your financial advisor before proceeding to make a move. An aircraft is an important purchase, which will imminently alter your budget for the upcoming years. So, it’s extremely important to be realistic. If you have experience with aircraft financing, feel free to leave your comments below.