Microlighters

Hi All

Have read all the previous posts regarding financing of second-hand planes, but would like to ask a few extra pertinant questions, especially since I have had documents in with AFC for a while now and have to keep chasing them with limited results. I would like to use my bond, but I have committed to spouse that house will remain paid for except for "neccesities" (Aerie isn't a nessicity in her book )

I will contact Dennis Jankelow & Assoc as well this week as recommended in posts, although their website does not indicate the fact that they do financing, will see what they say.

So my questions are:
* How long should it take to arrange financing (vehicles take a few hours to a week if all right docs provided)?
* What is a "normal" % deposit on an aircraft < R700,000
* Do banks/finance houses take into account number of hours flown or is that purely an insurance house concern?
* Which banks/finance houses offer finance on second-hand planes in the LSA category?
* Do the banks/finance houses care whether you are registered with Aero Club and MISASA?

Appreciate your views and responses.
Thanks
Kleva

kleva wrote: I will contact Dennis Jankelow & Assoc as well this week as recommended in posts, although their website does not indicate the fact that they do financing, will see what they say.

DJ&A just middleman. They arrange with banks as opposed to finance themselves. (ie they will go to ABSA, WESBANK etc on your behalf) AFS also do similar.

kleva wrote: So my questions are:
* How long should it take to arrange financing (vehicles take a few hours to a week if all right docs provided)?

Forever. Plenty longer than a car. 2-3 weeks minimum, unless you have everything available. (financials, both great grand parents to sign surety etc) . I have gone this route on 3 aircraft and EVERY time I have used the bond.... Aircraft financing (esp) second hand NTCA is not a high priority for banks at the best of times. Given current views on credit and problems with liquidity in the market rather you than me...

kleva wrote:* What is a "normal" % deposit on an aircraft < R700,000

30%+ and then anything from 36 months (WTF do me a favour) to 60 months

kleva wrote:* Do banks/finance houses take into account number of hours flown or is that purely an insurance house concern?

NO... Insurance only, but banks will require insurance and they will be 100% beneficiary of said insurance policy (not only 3rd party). You may also have to sign surety for excess. DJ&A do excess cover which is well worth it. never used to be able to get it on your own aircraft, but that changed a couple years ago..

kleva wrote:* Which banks/finance houses offer finance on second-hand planes in the LSA category?

Wesbank, ABSA, Stannic & Nedbank. If you have a private banker USE THEM, else DJ&A is a better bet. Wesbank are good since they have dedicated aviation dept. (Most of the others fall under pvt banking but Stannic have been punting for aircraft business in the press)

kleva wrote:* Do the banks/finance houses care whether you are registered with Aero Club and MISASA?

Not at all. I would suggest that it a good idea personally, but banks just want their money and interest back and MISASA & Aero Club can not help there so they not interested...

kleva wrote: Appreciate your views and responses.
Thanks
Kleva

Couple other issues that may be applicable....
Type?
Age?
Condition (hrs?)
Kit or fractory built?
Who will do maintenance?
Components (eg - VW not so good Rattex better)


GOOD LUCK....

Hi RV4ker

Thanks for the input. Wow, the financial answers are shocking though and seems like there needs to be another industry player who specialises. This to me seems like a brilliant market to go into.

Re: your additional questions, the A/C conforms to all decent requirements (no need to expose exactly which A/C, although dedicated forum watchers may have a clue).
Type: Will just say LSA NTCA for now
Year: Recent, under 5 years
Condition: Private, under 300 airframe hours, full maintenence records with agent, etc. ie: good to excellent
Build: Factory/Agent build
Maintenence: Agent
Components/Parts: All top notch, current owner a bit of a perfectionist, great cockpit layout, good kit, Proper well maintained Ratex 4 stoke.
Current Docs: Yes
Deposit willing to place: 15-20%
Period willing to finance: 36-54 Months

However, since this A/C may not come to pass, my general questions are more important for future reference.

Again, thanks for your input and response.
Kleva

Another thing....

DO NOT BUY THE PLANE THEN TRY FINANCE....

I thought this was a great idea. Buy the plane on O/D so I don't miss out on the deal and then get finance at the banks pace. They call it some obscure name and they frown upon it. i ended up selling the plane between 2 companies I owned (all BS book entries to satify the bank) that the plane was actually being "bought" and that I was not raising equity.... Ridiculous....

That said in today's market I would put in an offer with refundable deposit (or small deposit to secure) subject to finance being secured within a reasonable time. Buyer should jump at the offer....

I think you should rather try to convince your wife that you are a financial genius and prove to her that whilst your desire to not use the house bond is based on what you agreed, it is financially by far the better option.

You will not get a lower interest rate from any other finance facility and you can easily demontrate that if you set up a monthly debit order to establish the discipline of payment you will save a lot of money over the repayment period. In fact you could use that saving to take her on a romantic second honeymoon at a destination of her choice. She could end up pushing you to buy the plane asap.

and in fact a plane is a necessity. Two planes is nice to have etc etc. You need to get her a new book to read.

Thatchman, sounds like experience talking, but I must addmit, my story is much the same

Thatchman wrote:I think you should rather try to convince your wife that you are a financial genius and prove to her that whilst your desire to not use the house bond is based on what you agreed, it is financially by far the better option.

kleva

Go to the ABSA home page. There is a repayment calculator. Work on a home loan, then a finance loan for the aerie, then commit the extra payment of the aerie finance to a home loan - upped to finance the aerie. You wil see that in seven years time you will get the plane for free as a result of the xtra repayment on the home bond, and you will have money for that romantic getaway.

Thatchman wrote:You will not get a lower interest rate from any other finance facility

Fact - you will pay a much higher interest rate on the aerie finance.

Tell your wife you're going to impress her. Just go in to your branch and request a second bond coz you're building a pool/ lapa/ kitchen. If the total loan is within resale value and you're within payments, they should grant it.

Don't even mention aerrie- the common bank has no clue. Then buy said aerrie, make a sticker called 'Lapa' and call your wife. That should impress her.

Buy

weedy wrote:Thatchman, sounds like experience talking, but I must addmit, my story is much the same

Sounds more like an Accountant talking to me.........