Financing Issues To Consider When Purchasing An Aircraft
Same as with any other major purchase, acquiring an aircraft usually involves securing a loan.
Ft. Lauderdale, FL (Law Firm Newswire) September 13, 2010 – -The financing of an airplane, whether for business or personal needs, is a complicated process, with many different options and lending terms to consider.
Most fixed rate loans for airplanes range anywhere from 10 to 25 years, though shorter loan periods can also be found. And as
with other loans, there are fixed rate and adjustable rate options.
The lender will need to create a complete profile of you and the aircraft to complete the loan, which may require:
Similar to other loan processes, the lender will then prepare other documentation, including a security agreement, a promissory note and a surety from a third party to enhance credit worthiness.
Of course, there is always leasing if purchasing is not an option. Leases can be signed for periods ranging from less than a year to 10 years.
"Regardless of which option is chosen, it is important to think of the full financial impact that acquiring an airplane can have on your personal or business expenses. You must also consider the tax and regulatory costs," said Stewart Lapayowker, a Fort Lauderdale, Florida-based attorney who focuses his practice on aviation and aviation transaction law. "The Internal Revenue Code and federal tax issues, state tax laws and the Federal Aviation Administration will all impose rules that impact the potential use of the aircraft."
For example, each state has its own sales and use taxes for aircraft. Companies should carefully research the relevant taxes and not depend solely on the seller’s advice. In fact, companies may wish to hire an aircraft tax specialist to do this research for them.
If corporate aircraft owners don’t address these important issues, it could lead to lost tax deductions, penalties and interest.
If you are thinking of purchasing or leasing an aircraft for personal or business purposes, it is recommended that you contact an experienced aviation professional.
Stewart H. Lapayowker, P.A.
5360 N.W. 20th Terrace
Ft. Lauderdale, Florida 33309
Banyan Terminal at Ft. Lauderdale Executive Airport
- Lapayowker Jet Counsel, P.A. Moving to New Office Space in June
On June 10, 2016, Lapayowker Jet Counsel, P.A. will be relocating from Fort Lauderdale to newer, larger office space, at Lakeside Office Center, 600 N. Pine Island Road, Plantation, Florida. Family and community involvement continue to be important ingredients to our culture and our move will provide attorneys and staff with additional opportunities for personal […]
- Don’t Be the One to “Split Tens”
I am often asked by a client buying or selling an aircraft “how quickly will this deal be done?” or ” how much will this cost?” My answer is always the same: If you can tell me how everyone in the deal will behave, I can tell you generally how long it should take and […]
- “But it Was Just Spray Paint!”
The Federal Aviation Administration (FAA) recently issued proposed civil penalties ranging from $63,000 to $91,000 against three companies for alleged violations of Hazardous Materials Regulations (HMR). One such violation was for failing to properly mark a box containing two 12-ounce cans of spray paint. http://www.faa.gov/news/press_releases/news_story.cfm?newsId=16794&omniRss=press_releasesAoc&cid=102_P_R Applicable Hazardous Materials Regulations are complex and require the proper marking, […]
See other news sources publishing this article. BETA | Tags: Aviation attorney, aviation lawyer, aviation purchase agreements, aviation transaction attorney, aviation transaction lawyer, aviation transactions, jet transaction