18 Apr 2024, 08:03 [ UTC - 5; DST ]
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Post subject: Finance options for Mu2 Posted: 12 Apr 2024, 22:53 |
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Joined: 07/21/23 Posts: 4 Post Likes: +1 Company: Ual
Aircraft: C182
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Hi everyone,
I've been trying to work out financing to purchase an Mu2 and it is proving exceedingly difficult. I thought I had found a good source with good terms through JJ Best, but after applying and waiting a few days, I received an email today that their underwriters won't finance any turboprop over 20 years old. I was told by the representative that that based on my credit/income, they would loan me a million dollars or more to purchase a Meridian under 20 years old but wouldn't finance an Mu2 period. He put it succinctly that the problem isn't me or my finances, but the machine itself, which is why he mentioned the Meridian.
The Mu2 just checks every single box for me as far as space/payload/speed/reliability/opex/capex, it fits in my hangar, etc, etc so I'd really like to find a way to make it work, but with what I have to put down and my credit history, I have been surprised at the reluctance of lenders to finance what to me are very solid, clean, serviceable airplanes.
AOPA aircraft finance had offered me preliminary terms of 9.25% on a 10 year loan with a 20 year amortization. This is getting to the edge of what I consider reasonable even with the recent massive jumps in the fed funds rate and I was wondering if anyone had any ideas of who to reach out to for financing on late 70's Mu2's. I have top tier credit and plenty to put down but can't fully write a check for a nice one.
Issues that lenders have raised are 1. They won't finance Mu2's 2. No aircraft over 20 years old 3. No aircraft over 10,000 airframe hours
The example I am looking at is a 6500 hour specimen with 1300 since overhaul on the engines (5400 TBO) so it's probably one of the more eligible candidates for financing as Mu2's go since it's under 10,000 airframe hours and has relatively low time engines and some modern panel upgrades and new interior.
Does anyone know of any companies offering aircraft financing that won't reject these airplanes out of hand and that offer reasonable rates (under10%) for highly qualified borrowers? The asset based lenders all seem to be in the mid teens for interest rate and I'm just not paying that.
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Post subject: Re: Finance options for Mu2 Posted: 13 Apr 2024, 02:19 |
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Joined: 06/17/14 Posts: 5003 Post Likes: +1949 Location: KJYO
Aircraft: C-182, GA-7
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It would be nice if there was an airplane LendingClub or crowd lending type of operation for aircraft. With 50K folks on BT at $20 each, or $200 each if only 10% of us invested, we’d have you covered and then some. Granted, I would only profit $14 off that investment for my $200.
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Post subject: Re: Finance options for Mu2 Posted: 13 Apr 2024, 05:59 |
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Joined: 06/18/15 Posts: 567 Post Likes: +215 Location: Idaho
Aircraft: Helio Courier, MU2
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Have you considered using something other than the MU2 as collateral for a loan and using the loan proceeds to purchase the airplane? I assume that you can get hull insurance at a rate you can live with?
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Post subject: Re: Finance options for Mu2 Posted: 13 Apr 2024, 08:16 |
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Joined: 07/21/23 Posts: 4 Post Likes: +1 Company: Ual
Aircraft: C182
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Username Protected wrote: Have you considered using something other than the MU2 as collateral for a loan and using the loan proceeds to purchase the airplane? I assume that you can get hull insurance at a rate you can live with? I have some real estate holdings with some equity, but the LTV's don't really support pulling any more equity out, so that's not really an option. It's kind of a bummer that there's these great old airplanes that are being kneecapped by the finance industry. It also seems to me to be self feeding problem because they're worried about being made whole if the borrower defaults because they're hard to sell, but they're hard to sell because the financing is hard to get. It's a frustrating situation.
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Post subject: Re: Finance options for Mu2 Posted: 13 Apr 2024, 09:29 |
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Joined: 06/18/15 Posts: 567 Post Likes: +215 Location: Idaho
Aircraft: Helio Courier, MU2
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Username Protected wrote: Have you considered using something other than the MU2 as collateral for a loan and using the loan proceeds to purchase the airplane? I assume that you can get hull insurance at a rate you can live with? I have some real estate holdings with some equity, but the LTV's don't really support pulling any more equity out, so that's not really an option. It's kind of a bummer that there's these great old airplanes that are being kneecapped by the finance industry. It also seems to me to be self feeding problem because they're worried about being made whole if the borrower defaults because they're hard to sell, but they're hard to sell because the financing is hard to get. It's a frustrating situation.
I know a lot of MU2 owners and I’m not sure I know anyone who has a loan secured by their airplane. They are so relatively cheap in relation to operating cost that there probably aren’t too many people who would be looking to finance the initial purchase
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Post subject: Re: Finance options for Mu2 Posted: 13 Apr 2024, 13:42 |
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Joined: 03/16/13 Posts: 51 Post Likes: +92
Aircraft: CE-510
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I financed my MU2 through Bob Howe and Dorr Aviation. Robert H. Howe President Dorr Aviation Credit Corp 579 Pleasant Street, Suite 3 Paxton, MA 01612 Phone: 800-214-0066 Cell: 508-989-2226 Fax: 508-363-1700 howe@dorraviation.comwww.dorraviation.com
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Post subject: Re: Finance options for Mu2 Posted: 13 Apr 2024, 14:27 |
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Joined: 07/21/23 Posts: 4 Post Likes: +1 Company: Ual
Aircraft: C182
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Username Protected wrote: I financed my MU2 through Bob Howe and Dorr Aviation. Robert H. Howe President Dorr Aviation Credit Corp 579 Pleasant Street, Suite 3 Paxton, MA 01612 Phone: 800-214-0066 Cell: 508-989-2226 Fax: 508-363-1700 howe@dorraviation.comhttp://www.dorraviation.comThank you! I will reach out to them on Monday.
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Post subject: Re: Finance options for Mu2 Posted: 14 Apr 2024, 10:36 |
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Joined: 12/22/07 Posts: 12880 Post Likes: +13294 Company: Midwest Chemtrails, LLC Location: KPTK (SE Michigan)
Aircraft: C205
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Username Protected wrote: I financed my MU2 through Bob Howe and Dorr Aviation. Robert H. Howe President Dorr Aviation Credit Corp 579 Pleasant Street, Suite 3 Paxton, MA 01612 Phone: 800-214-0066 Cell: 508-989-2226 Fax: 508-363-1700 howe@dorraviation.comhttp://www.dorraviation.comI did the typing, so you don’t have to … Attachment: IMG_2040.jpeg
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Post subject: Re: Finance options for Mu2 Posted: 14 Apr 2024, 17:22 |
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Joined: 07/21/23 Posts: 4 Post Likes: +1 Company: Ual
Aircraft: C182
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Thank you guys for the thoughtful replies. Dorr replied already and sent me an app. I will be calling around tomorrow to the others mentioned and there are also some small family banks that my family has relationships with that I will approach about financing.
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