Airplane Loan for a Champ?

[jimboe]

I've come to the conclusion that Aeronca owners must be pretty wealthy folks, because I searched the bulletin board high and low for info on airplane financing and couldn't find any, so I'm assuming you all paid cash for your Champs and Sedans.

Seriously, my partner wants to sell his half of our Champ and I want to buy it, but I need to find a $25,000 loan at a much better rate than the 12% interest rate banks and credit unions will offer. AOPA loans are from B of A at 12.25%.

I just bought my wife a new Honda Civic with a 1.9% interest 5-year loan so I'm wishing I can get a reasonable rate for the Champ.

I called Airfleet Capital because they offer loans for Light Sport aviation (with a photo of a Piper Cub). Unfortunately, they don't make loans for aircraft older than 1960. WTF?

The best I've come up with so far is NAFCO (airloans.com) at 8.5% for 10 years.

Anybody have any other recommendations?

Thanks
Jim

[Nathan K. Hammond]

A $50,000 Champ??? Must be a $hit hot airplane. You might get it appraised first off.
Older brother Clay works in aircraft sales and might be able to shed some light.

nkh

[Clay]

Airplanes very different than cars. Much different market. Also consider than your loan on the Civic is probably manufacturer subsidized. Loans on new aircraft right now are hovering around 6.5-7.0% and twenty years if great credit. Pre-owned up around 8% last I looked. Vintage/Classic? Mixed bag...your offer from the local bank might be your best route. Half the problem with the aviation lenders out there is they get cagey when writing on something they know absolutely zero about...i.e. 60 year old airplanes. And they're used to making half a point or so off of $400K-$40M purchases, dealing with a $25,000 loan is not high on their list. not trying to be mean, just letting you know how they are thinking.

Regarding Airfleet...despite the age limit, they also won't write under $50K if I'm not mistaken.

Try these below. Google for contact info.

Dorr Aviation Credit
Aircraft Banking Centers
Zook & Associates (Courtesy Aircraft recommends)
Airloan - Red River State Bank (small outfit, might be your best bet)

[jc pacquin]

Banks loan money to people who don't need a loan, especially now, after they have been caught with their pants down making un secured loans to prospective home owners. Credit unions are best bet. I don't understand a 50 thousand dollar Champ unless its a new one. I agree with the others that banks have no understanding of aircraft so when you say it a 1946 or something like that, they get real nervous and look at you like you have two heads. Don't know the particulars so can't give definate answer. In the current economic mess, your gonna pay dearly! JC

[jimboe]

Thanks for the feedback, guys. I'm still working on it. Airloan/Red River Bank said I qualified, but they haven't mentioned what the terms are yet.

Nathan, my Champ is sweet, but it's not a $50,000 model, yet. It's worth $30,000. I need $15,000 for my partner's share and another $10,000 to pay off my original loan for my share, hence the $25,000 figure. The interest rate drops from 12% to about 8% if I borrow $25k or more.

Jim

[flyingfool]

I was fortunate at the time to take a home equity loan to fund my Chief before all this credit crisis hit. That is the good news. The bad news is that I also am in debt far enough now that home prices declined that I was unable to refinance to a new lower rate because I no longer have 20% equity. Easy come easy go.

Airfleet and stuff I found had a minimum amount of loan value.

Now I can write off the interest as it is a home equity loan.

You can also try and find another partner! Maybe someone looking to downsize from a different plane.

[joea]

I took out a loan when I bought my Chief. It was a home equity loan and something like 6% but that was years ago. Glad I did...

[Dennis]

My girlfriend loaned me the money to buy my first plane......so I married her.

Dennis

[jimboe]

I would prefer the home equity loan, but we just did a $60,000 remodel (my wife's version of an airplane) and re-financed to get a single mortgage at a low rate. She doesn't like the idea of betting the farm on a frivolous toy.

Dennis, my wife wouldn't even look at my Champ until I told her I took out a $150,000 life insurance policy for pilots. Now she encourages me to go flying, even when the weather is bad. I think you scored well.

Jim

[joea]

My girlfriend loaned me the money to buy my first plane......so I married her.

Dennis

She have any single sisters?

[Dennis]

As a matter of fact............

Dennis

[joea]

If they like Dr. Phil, I look A LOT like him!

[WWhunter]

LMAO!!! Joe isn't joking...He sorta resembles Dr. Phil.

I did the home equity loan thing also to buy stuff. At least that way I "feel" like I'm getting screwed less by the gov'ment.

[Dennis]

Hey Joe,

My sister-in-law shares her house with her 92 year old mother. They watch Dr. Phil every day. You may be a shoe in......

BTW, I mentioned you to her (for once, I am not kidding) and she did not turn you down out of hand. The flying part did not bother her. But she did ask to see your bank account.

Maybe we can arrange an aeronca flyby at ya'lls wedding or, better yet, have it at Middletown. You better get to working on it!


Jimboe,

After I hit my wife in the head with a prop and dropped a hanger door on her, she cancelled her life insurance and quit going to the hanger to help me. Now she just watches as I work. The only time she ever refused to fly with me was just after I almost ran out of gas at night. She got over it when we made a deal that she had 100% authority to call the fuel stops.

Dennis

[jimboe]

I just got a $25,000 loan for 15 years at 7.25% from Red River State Bank in MN. The monthly payments are $226.

I bought my partner's share and paid off my original loan balance, and had a couple thousand left over for the airplane fund.

It feels good to be able to make all the decisions and not have to worry about scheduling.

Thanks, as usual, for all your comments.

Jimbo