Section 2: Get Finance-Ready First

A. Why Pre-Approval Changes Everything

A lot of buyers start viewing aircraft before they have any sense of what a lender would be willing to offer. That can create a mismatch very quickly.

This is where a Decision in Principle (DIP) becomes valuable. A DIP is an early indication from a lender of how much they may be willing to lend based on your financial profile. It is not a final offer, but it gives you a working budget and shows sellers that you are serious.

Having a DIP in place changes the tone of the buying process. You move from browsing to being in a position to act.

A Decision in Principle usually gives you:

• A Clear Borrowing Range – Helps establish how much you may be able to borrow before you begin seriously looking at aircraft.
• Stronger Credibility with Sellers – Sellers tend to take enquiries more seriously when they know a buyer has already spoken to a lender.
• Faster Progress Once You Find an Aircraft – With a DIP in place, much of the early finance work has been done.
• An Early View of Monthly Costs – You can start to understand what your repayments may look like.

Most Decisions in Principle remain valid for around 30 to 90 days, depending on the lender.

B. What Lenders Look At

Many buyers assume that lenders only care about income. Income matters, but it is only one part of the picture. Aircraft finance tends to be more detailed than standard personal lending because the lender is assessing both you and the aircraft itself.

The more organised and complete your information is at the outset, the easier the process tends to be. Missing documents or unclear financials often create delays that could have been avoided.

Lenders will usually ask for:

• Proof of Income – Payslips and P60 for employed buyers. Company accounts, tax returns, SA302s, or dividend statements for self-employed buyers or business owners.
• Recent Bank Statements – Most lenders ask for between three and six months of statements to understand spending habits and existing financial commitments.
• Credit Check Information – A credit check to review borrowing history. Missed payments or large outstanding debts can affect the decision or the rate offered.
• Proof of Deposit – You will need to show that your deposit funds are available and explain where they have come from. Lenders generally prefer deposits from savings rather than borrowed funds.
• Aircraft Details – Once you have chosen an aircraft, the lender will want information such as its age, value, maintenance history, registration type, and whether it is certified or on a Permit to Fly.

C. Typical Deposit Requirements

In many cases, lenders look for a deposit of between 10% and 20% of the aircraft value. A stronger deposit can improve your borrowing position because it reduces the lender's exposure and shows a greater level of commitment from your side.

Typical deposit expectations include:

• 10% Deposit – Often achievable for newer aircraft, well-known types, and buyers with strong financial profiles. Tends to be the minimum level many lenders are comfortable with.
• 15% to 20% Deposit – The range many buyers ultimately fall into. Provides a good balance between borrowing and personal contribution.
• Higher Deposits for Older or Specialist Aircraft – If the aircraft is older, has unusual modifications, or sits outside standard categories, lenders may ask for more money upfront.
• Improved Terms with Larger Deposits – A bigger deposit can sometimes help reduce the interest rate, lower the monthly repayment, or shorten the finance term.

D. How Aircraft Age and Type Affect Your Rate

Many buyers are surprised to learn that the aircraft itself can influence the interest rate they are offered. From a lender's perspective, not all aircraft carry the same level of risk.

Newer aircraft tend to attract better rates because they are seen as more reliable assets with a clearer resale market. Aircraft type also plays a role — certified aircraft are generally easier to finance than Permit to Fly or Light Sport Aircraft.

Factors that can affect your rate include:

• Aircraft Age – Newer aircraft are usually seen as more stable assets. Older aircraft may still qualify for finance, but rates can be slightly higher.
• Aircraft Value – Higher-value aircraft can sometimes benefit from more favourable financing terms because they offer stronger security to the lender.
• Certification Status – Aircraft with a full Certificate of Airworthiness are generally easier to finance. Permit to Fly and some Light Sport Aircraft can be more difficult.
• Your Financial Profile – A clean credit history, strong and stable income, and a larger deposit all help improve the rate you are likely to receive.
• Maintenance History – Aircraft with clear maintenance records and no major gaps in documentation are viewed more positively by lenders.