asset based aircraft financing

Asset Based Aircraft Financing - Banks rarely make asset-backed loans in the plunger market. This is because lenders can easily and quickly reverse the piston financing.

Aerial photo by AOPA Editor at Large Tom Horne flying Thierry Pouille's Cessna Mustang along the California coast between Monterey and San Francisco. San Francisco Bay San Francisco CA US

Asset Based Aircraft Financing

Let's say you have good enough credit that with 15% down, a bank will lend you the money to buy a $2.1 million 2010 Cessna Citation Mustang. After you've owned the plane for three months, a 500-year flood hits the factory in which you have a 50% share, along with half the units of a garden apartment complex you own near the coast . All your submerged construction machinery is declared a total loss, with replacement equipment 18 months away by container ship. You are forced to close the factory. Half of the apartment complex's tenants have left for good, causing a loss of that income. And the hangar where you kept your aircraft blew its roof off, causing cosmetic damage to your jet. You can't pay the loan, so the bank has to repossess.

Financing A Business Jet In Today's Volatile Market

Now the bank has to deal with a $1.79 million loan and a damaged Cessna Citation Mustang. Worst case scenario, repairing this damage would cost $149,000. Add another $30,000 to deal with recovery, restructuring, remarketing and resale. At $179,000 (or 8.5% of the original value of the plane) the lender still has plenty of room to get out in full.

In another example, however, let's say you borrow $100,000 to buy a $120,000 early 70s Cessna 210 with good P&I, modern electronics, and a mid-hour engine. A few months later, a tornado hits the car dealership and mall you own—all in the same place—destroying your showrooms, 85% of your vehicle inventory, and 90% of the structures in the mall. Your insurance was never intended to cover such a large loss. Additionally, your retail tenants will not be able to recover from the damage. And then there's the matter of a partially damaged hangar where you keep your Cessna 210... You're forced into bankruptcy, forcing the lender to foreclose.

Now the lender is stuck with a $100,000 loan on an airplane that needs some fuselage repairs. Best case scenario, metalwork, paint, recovery papers, repair and remarketing will cost another $30,000. This lender is "underwater" 10% of their loan and must request personal funds from the borrower to recoup their loss. An extreme case, but still a bad bet, from a lender's perspective, and why a lender doesn't typically offer asset-based loans on piston aircraft.

Great advice. Great prices. From helpful and responsive iterations you can trust. Three good reasons to turn to AOPA Aviation when buying or refinancing an airplane. If you need a reliable source of financing with people on your side, just call 800.62.PLANE (800.627.5263) or click here to request a quote.

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Adam Meredith, President of AOPA Aviation Company, is an aviation professional with over 15 years of lending, small business management and customer service experience. Adam is a commercial pilot with multiple engine and instrument ratings. On the occasion of the 53rd Paris International Air Show, discover all about our aircraft financing expertise, our teams and our major transaction for 2018!

For more than 40 years, Crédit Agricole CIB has been active in the field of aviation financing and is one of the world leaders in aircraft financing.

Crédit Agricole CIB finances passenger and cargo aircraft, including spare engines, business jets. The Bank offers its customers (airlines, aircraft, engines or trains, individual owners) a wide range of products and know-how in collaboration with the various product lines of Crédit Agricole CIB.

Crédit Agricole CIB offers all products to customers in the aerospace sector, such as financing, products around financing (equity, bonds, swaps and forex, Treasury, etc.) and is the coverage entry point within Crédit Agricole, which it is one of our strengths.

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Based in Paris, New York, Hong Kong and Tokyo, our teams specializing in air transport are organized in a "one-stop shop" model: each client is followed by a senior banker who covers the client portfolio and offers all the knowledge how of the Bank.

, with the award "Aviation Finance House of the Year", "Aviation Finance Bank of the Year" or "Transport Finance House of the Year".

These awards are a result of the teams' efforts to provide high value banking and capital markets advice and/or solutions to industry clients in EMEA, Asia Pacific, Africa and the Americas.

The Bank was also ranked the 2nd largest settler globally (by number of transactions) by AirFinance Journal in 2018. Prior to Shearwater, Mr. Paresi is with AMP Associates Inc. where he is a business analyst. In his current position as Director of Operations & Financial Reporting, Mr. Paresi is responsible for managing the loan portfolio, including loan pricing, collections, maintenance monitoring and investor relations. Additionally, Mr. Paresi oversees Shearwater's data analytics platform, including data collection, analysis and visualization. Mr. Paresi is from New York and enjoys spending time with family, playing sports and volunteering. Mr. Paresi received a BA from the University of Central Florida.

Asset Based Finance

Before Shearwater, Mr. O'Donnell is with Nomura Asset Management where he is a Business Analyst focusing on operational projects. Prior to his role as Director of Originations, Mr. O'Donnell was responsible for managing the loan portfolio, including loan pricing, collections, maintenance monitoring and monthly reporting to investors. He also oversees research focused on current and residual values ​​of potential and current portfolio aircraft. Mr. O'Donnell has been involved in the financing of over $150 million in aircraft assets. He is from the metro Atlanta area, coaches competitive youth Lacrosse. He is a graduate of the University of Georgia, where he studied Finance in the Terry College of Business.

Chris Miller has more than 30 years of experience in aviation and human capital. Prior to Shearwater, he managed Guggenheim Partners' Business Aircraft Investment (BAI) Group. BAI Group provides capital solutions to the aviation business industry, particularly asset-based lending on medium to large aircraft. In recent years, Mr. Miller's aviation trading and financing has focused on Europe, emerging Europe, Asia, the Middle East and Africa.

Prior to a career in corporate aviation finance, Mr. Miller is the US division of a UK-based performance management consultancy working with management teams of small and large organizations to implement their strategies. Notable projects include working with a private equity group to develop a cargo transportation business in geopolitically volatile areas of the world, as well as working with major defense contractors to fulfill urgent requests from US military forces based in Iraq and Afghanistan.

Prior to entering the business world, Mr. Miller served in the United States Marine Corps as an F/A-18 pilot, Aircraft Maintenance Officer and Aviation Safety Officer. He is a graduate of the USA. Navy & Marine Corps Aviation Safety School and currently holds a commercial pilot rating. He is a recognized "Senior Aircraft Appraiser" with the American Society of Appraisers (ASA) and serves on its Investments Committee. He is also a past president of the National Aircraft Finance Association (NAFA). Mr. Miller received a BA from Denison University and an MBA from Columbia University.

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Mr. Moga joins the Shearwater Advisory Board with experience in aviation finance, investment strategy and professional services development.

Mr. spent Moga spent the past 7 years at McKinsey & Company serving energy, industrial and aerospace clients and growth initiatives in energy and private equity opportunities. He also served as part of the Houston location and oil and gas practice leadership teams.

Prior to McKinsey & Company, Mr. Moga is part of Guggenheim Partners' Business Aircraft Investment (BAI) Group. Mr. Moga focused on portfolio management, business aircraft market analysis and asset underwriting for a growing portfolio of mid to large size business aircraft loans.

Mr. Moga began his professional career serving as an infantry officer in the United States Marine Corps. He received a BA from the United States Naval Academy and an MBA from the MIT Sloan School of Management.

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Before Shearwater, Mr. Carter is with PNC Bank where he is a Branch Manager at various locations managing small business development and home equity lending. He holds a degree in Finance from Auburn University and is active in various philanthropic activities related to the University.

Lady. Barilov is currently Co-Founder and Head of Business Development at Jump Aero. Jump Aero is an early-stage startup working to use emerging eVTOL technology to help first responders save lives. He is actively involved in the next generation of emerging aviation technologies and sits on the advisory boards of two other startups, Hermeus Aviation and Spike Aviation. He also serves on the NBAA Emerging Technology Committee.

In addition to her interest in eVTOL, Ms. Barilov has extensive experience in aviation, asset-based structured finance and corporate strategy. Prior to her experience at Shearwater, Ms. Barilov is an investment banker in Goldman Sachs' Industrials group in New York, focused on helping leading clients in the aviation, aerospace and defense industries. In this role, Ms. Barilov was testing,

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