Thursday, June 24, 2010
Akarsha Hot In towel
Private pilots, corporate pilots and executive companies greatly benefit by having their own airplane available to them around the clock. In this day of advanced technology time is definitely money, and if you have to depend on a commercial airline's schedule and unexpected delays you could find yourself suffering from the "time to spare go by air" philosophy that frequent travelers are subjected to. The choice is whether it is beneficial to buy an airplane or look into airplane leasing. From light airplanes to jumbo jets the sky is the limit when it comes to financing choices for airplanes.
The convenience of having your airplane readily available is a priceless option for many people. The choice of leasing versus buying an airplane is very similar to that of a car if it is for business purposes. Typically, a purchase will allow the owner to take the depreciation. With airplane leasing the lessee will be able to deduct the payments as current expenses. The lease is also considered "off the balance sheet", so a business' financial statement will give them a positive financial leverage ratio as well as not showing as a lien or liability.
The application process is pretty well the same for leasing as for outright purchasing. The down payment or deposit is usually based upon the credit worthiness of the company or individual and may require a personal guarantee. Usually, you can count on paying 10% to 15% down with an amortization schedule from 7 to 15 years.
Most companies have a payment calculator on their web sites so you will be able to anticipate the payment amounts before you begin the application process. Most airplane leasing companies will not consider an airplane older than 20 years. You'll be expected to present three years of company and personal financial statements, tax returns, bank records and trade references.
As with a car, an airplane lease may have specific conditions when it comes time for the lease to expire. Your contract may state a specific amount of hours on the engine just as a car lease contracts you to a maximum number of miles.
There may also be a very financially attractive offer at the end to encourage you to buy the airplane. Ultimately, airplane leasing will be less expensive than purchasing, considering the tax advantages and the sales price of an airplane. You'll have a luxury aircraft at a fraction of the cost. What a perfect scenario for every pilot or business executive!