Cash purchases are common in aviation, but they aren’t the only way to buy an aircraft. Many buyers choose to finance some or all of the purchase, whether they’re stepping up to their first aircraft or adding a turboprop or jet to a growing operation.

Aircraft financing works differently than financing a car or a home. Lenders evaluate the aircraft, the buyer, and the intended use before approving a loan, and the process can move quickly or slowly depending on how well a buyer is prepared.

Understanding how aircraft financing works before you start shopping can help you move faster when you find the right aircraft and avoid surprises during closing.

How Aircraft Financing Works

Aircraft loans are typically secured against the aircraft itself, similar to a mortgage on a home.

The lender registers a lien against the aircraft, which remains in place until the loan is paid off. If payments aren’t made, the lender has the right to repossess the aircraft, which is why lenders pay close attention to both the aircraft’s condition and the buyer’s ability to repay.

Most aircraft loans are offered through specialty aviation lenders rather than traditional banks, since aircraft financing requires familiarity with aircraft values, depreciation, and registration requirements that general lenders may not have.

What Lenders Look At

Aircraft lenders typically evaluate several factors before approving a loan.

Common considerations include:

• Aircraft age, make, and model
• Total airframe and engine time
• Maintenance history and logbook completeness
• Buyer’s credit history and financial position
• Intended use of the aircraft
• Pilot experience and hours in type, particularly for higher-performance aircraft

Older aircraft, aircraft with incomplete logbooks, or aircraft outside a lender’s typical portfolio can be harder to finance, even when the buyer’s credit is strong. This is one reason documentation matters just as much to a lender as it does to a buyer.

Down Payment Expectations

Down payment requirements vary by aircraft type, age, and the buyer’s financial profile.

As a general guide:

• Piston aircraft often require a down payment in the range of 15 to 20 percent
• Turboprops and light jets often require 15 to 25 percent
• Older or higher-time aircraft may require a larger down payment to offset depreciation risk

Buyers with strong credit, a solid financial position, or an existing relationship with a lender may be able to negotiate more favourable terms.

Loan Terms and Interest Rates

Aircraft loan terms are generally shorter than a residential mortgage.

Terms of 10 to 20 years are common for newer aircraft, while older aircraft may only qualify for shorter terms because of depreciation. Interest rates depend on the buyer’s credit profile, the aircraft’s age and value, and general lending conditions at the time of the loan.

Piston aircraft, turboprops, and jets are often treated differently by lenders, since each category carries a different risk and resale profile.

New vs Used Aircraft Financing

New aircraft are generally easier to finance, since lenders have more data on current market value and depreciation.

Used aircraft can still be financed, but lenders will usually pay closer attention to maintenance history, remaining time before overhaul, and any damage history. An aircraft with well-organized records and a documented maintenance history is typically viewed more favourably than one with gaps or missing logbooks.

This is one reason a pre-purchase inspection often plays a role in the financing process. Some lenders require one before approving a loan on a used aircraft.

Documentation You’ll Need

Preparing your documentation in advance can help the financing process move faster.

Lenders typically request:

• Proof of income and financial statements
• Credit history
• Pilot certificate and logbook, particularly for higher-performance aircraft
• Details on the aircraft, including make, model, year, and total time
• A copy of the purchase agreement
• Insurance information

Having these ready before you make an offer can shorten the time between an accepted offer and closing.

How Financing Affects Your Purchase Timeline

Financing adds steps to the buying process that a cash purchase doesn’t require.

Loan approval, appraisal requirements, and lien registration all take time, and some lenders require a pre-purchase inspection to be completed before funding is released. Buyers who wait until after finding an aircraft to start the financing conversation often find themselves working against a seller’s timeline.

Getting pre-approved before shopping gives buyers a clearer budget and puts them in a stronger position when negotiating, particularly in a competitive market. Our guide to buying an aircraft in Canada walks through how financing fits into the broader purchase timeline.

Common Mistakes When Financing an Aircraft

A few mistakes come up regularly with first-time aircraft buyers.

Underestimating total ownership costs is one of the most common. A loan payment is only one part of the monthly cost of owning an aircraft, alongside insurance, hangar fees, maintenance, and fuel. Our guide to aircraft ownership costs breaks down what to expect beyond the purchase price.

Other common mistakes include waiting too long to start the financing conversation, assuming all lenders treat aircraft the same way, and not confirming financing terms before making an offer on a specific aircraft.

Should You Finance or Pay Cash?

There’s no single right answer, and the decision often comes down to personal financial strategy rather than aircraft ownership itself.

Some buyers prefer to pay cash to avoid interest costs and keep the aircraft free of a lien. Others prefer to finance in order to preserve cash for other investments or business needs. Buyers considering aircraft ownership for business use should also speak with an accountant about how financing may affect tax treatment and depreciation.

Either approach can work well. What matters most is understanding the full cost of ownership and choosing the path that fits your financial situation.

How Raven Aircraft Sales Helps Buyers Navigate Financing

Financing is one of the details buyers often underestimate when planning a purchase, and having the right guidance early can prevent delays later in the process.

At Raven Aircraft Sales, we help buyers understand how financing fits into their overall purchase timeline and can connect them with aviation lenders who understand the aircraft category they’re considering. Whether you’re financing a first piston aircraft or a turboprop for business use, having an experienced advisor involved from the start can help the process move smoothly.

Browse our current inventory or contact us to talk through financing considerations for your next aircraft.

Final Thoughts

Aircraft financing follows its own set of rules, and understanding how it works before you start shopping can save time and reduce stress later in the process.

Whether you plan to finance or pay cash, the same principles apply. Know your budget, understand the total cost of ownership, and have your documentation ready before you find the aircraft you want to buy.

If you’re planning a purchase and want guidance on financing or budgeting, the Raven Aircraft Sales team can help. Contact us for a confidential discussion about your next aircraft.

Frequently Asked Questions

Can you finance a used aircraft in Canada?

Yes. Used aircraft can be financed, though lenders typically pay closer attention to maintenance history, total time, and documentation than they would with a new aircraft.

How much of a down payment do I need to finance an aircraft?

Down payments typically range from 15 to 25 percent depending on the aircraft’s age, type, and the buyer’s financial profile. Older or higher-time aircraft may require a larger down payment.

Do I need a pre-purchase inspection to get financing?

Some lenders require a pre-purchase inspection before approving a loan on a used aircraft. Even when it isn’t required, it’s a good practice regardless of how the aircraft is being purchased.

How long does aircraft financing take to arrange?

Timelines vary, but getting pre-approved before you start shopping can significantly shorten the time between an accepted offer and closing.

Is it better to finance or pay cash for an aircraft?

It depends on your financial situation and goals. Financing preserves cash for other uses, while paying cash avoids interest costs and keeps the aircraft free of a lien.

Do banks offer aircraft loans, or do I need a specialty lender?

Most aircraft loans come from specialty aviation lenders rather than traditional banks, since aircraft financing requires specific knowledge of aircraft values and depreciation.

What documents do I need to apply for aircraft financing?

Lenders typically request proof of income, credit history, pilot certification and logbook details, information on the aircraft, and a copy of the purchase agreement.