| "body"> | | | | (c) A larger down payment |
| If you're interested in purchasing an aircraft whether | | | | (d) A title search |
| it be for personal or commercial reasons, you'll of | | | | Answer: (c) If you said a larger down payment, you |
| course need to know a little bit about the aircraft | | | | are correct. |
| financing process. Take the following quiz and see if | | | | (4) What is an "advance fee scheme?" |
| you have the necessary understanding to proceed | | | | (a) A scheme used by some unscrupulous lenders |
| with attaining an aircraft finance loan. | | | | who ask for a sizeable down payment to fund |
| (1) With regards to aircraft financing for aircraft | | | | experimental aircraft. |
| under $100,000, generally what is the loan term for, | | | | (b) An advance fee scheme is used by some aircraft |
| say, a 15 year amortized loan? | | | | finance lenders to secure the funds needed in order |
| (a) Generally, a 15 year amortized loan has a loan | | | | to conduct a title search and valuation of an airplane. |
| term of 3 years. | | | | (c) Advance fee schemes are used to lower aircraft |
| (b) The term for such a loan is 2 years. | | | | financing rates on single engine and twin engine |
| (c) A 5 year term is usually imposed for this type of | | | | planes. |
| loan. | | | | (d) Advance fee schemes have been used in some |
| (d) None of the above. | | | | instances of commercial aircraft financing for turbo |
| Answer: (c) Because most borrowers generally | | | | props that arehard to finance. An initial fee is charged |
| upgrade their aircraft after 5 years, the 5 year term | | | | by a lender with the pledge of financing the loan if |
| is usually prescribed. | | | | the borrower pays the "upfront" expense. |
| (2) How long can the amortization schedule stretch | | | | Answer: (d) Beware if you're in the market to |
| on a loan for an aircraft over $100,000? | | | | finance any jet or turbo prop that has restrictive |
| (a) The length of amortization can be as long as ten | | | | lending requirements. Many people have lost their |
| years. | | | | money by succumbing to such a scheme. |
| (b) Amortization can span over as much as fifteen | | | | (5) What is the best type of financing to choose if |
| years. | | | | you need to make significant avionic upgrades to |
| (c) Sometimes an amortized loan of this type can | | | | your aircraft? |
| extend 20 years. | | | | (a) A 5-year fixed/adjustable rate loan. |
| (d) Most amortized loans for aircraft over $100,000 | | | | (b) A 7-year fixed balloon loan. |
| can go as long as 30 years. | | | | (c) Experimental aircraft financing |
| Answer: (c) An amortized loan over the $100,000 | | | | (d) A 20-year fixed rate loan |
| mark can have a breadth of 20 years. | | | | Answer: (d) If you need to make repairs or upgrades |
| (3) With regards to experimental aircraft financing | | | | every several years to your aircraft, this is the loan |
| what is generally required of a kit-built plane versus a | | | | to choose. |
| plane that has not been kit-built? | | | | How'd you do on the above quiz? Can you improve |
| (a) FAA registration | | | | on your knowledge with respect to aircraft financing? |
| (b) An appraisal | | | | A little "barnstorming" session never hurts anyone. |