Private Jet Financing Guide: Terms, Rates & Lenders (2026)

Financing a private jet purchase allows corporations and business entities to preserve liquidity while acquiring aviation assets. This comprehensive guide covers financing structures, typical terms, tax considerations, and strategies to secure competitive rates for aircraft ranging from $3 million light jets to $75 million+ ultra-long-range aircraft.

Why Finance a Private Jet?

While many jet buyers have sufficient liquidity for all-cash purchases, financing offers several strategic advantages:

• Liquidity Preservation: Deploy capital into higher-returning investments (private equity, real estate) while leveraging low-cost debt for the aircraft
• Tax Benefits: Interest expense and depreciation deductions can significantly reduce effective ownership costs
• Balance Sheet Optimization: Off-balance-sheet financing structures available for corporate buyers
• Flexibility: Upgrade to newer aircraft without liquidating large capital positions

Aircraft Financing Structures

1. Traditional Secured Loan

The most common structure for private jet financing. The lender takes a first-priority security interest in the aircraft, registered with the FAA Aircraft Registry.

• Loan-to-Value (LTV): 70% - 85% for newer aircraft (<10 years old)
• Interest Rates: 6.5% - 9.5% (SOFR + 350-550 bps)
• Terms: 5-15 years with monthly payments
• Down Payment: 15% - 30% of purchase price
• Amortization: Fully amortizing or balloon payment at maturity

2. Operating Lease

The lender (lessor) purchases the aircraft and leases it to you for a fixed term. At lease end, you can purchase the aircraft at fair market value, return it, or enter a new lease.

• Typical Term: 5-10 years
• Monthly Payment: Lower than loan payments (no principal amortization)
• Tax Treatment: Lease payments fully deductible as operating expense
• Balance Sheet: Off-balance-sheet treatment (no debt recorded)
• Best For: Corporations seeking to avoid debt covenants or balance sheet impact

3. Sale-Leaseback

If you already own an aircraft outright, you can sell it to a lessor and immediately lease it back, unlocking liquidity while retaining operational control.

• Liquidity Extraction: 70% - 85% of aircraft value
• Typical Term: 5-12 years
• Use Case: Freeing capital for business expansion, debt repayment, or portfolio diversification

Qualification Requirements

Personal Credit Profile

• Credit Score: Minimum 680; 720+ for optimal pricing
• Net Worth: Typically 2-3x the aircraft purchase price
• Liquidity: 12-24 months of operating costs (fuel, hangar, insurance, maintenance) in liquid reserves
• Income Verification: Last 2 years tax returns showing sufficient income to support debt service

Aircraft Requirements

• Age: Most lenders finance aircraft up to 20-25 years old; newer aircraft (<10 years) receive best terms
• Condition: Pre-purchase inspection required; major maintenance issues may reduce LTV
• Registration: Must be U.S.-registered (N-number) or eligible for U.S. registration
• Insurance: Hull and liability coverage with lender named as loss payee
• Appraisal: Independent appraisal from NAAA-certified appraiser

Tax Considerations

Bonus Depreciation (Section 168(k))

Under current tax law, businesses can deduct 100% of a new or used aircraft's cost in the first year if it's used more than 50% for business purposes. This creates substantial tax savings:

Example: A $15 million Gulfstream G550 purchased by an S-Corp or LLC generates a $15 million first-year deduction, saving $5.55 million in federal taxes (37% marginal rate) plus state tax savings.

Interest Deductibility

Interest on aircraft loans is fully deductible for business use. Personal use percentage must be allocated and is not deductible.

• 100% Business Use: All interest deductible
• 75% Business / 25% Personal: 75% of interest deductible
• Documentation Required: Flight logs showing business vs personal use

Sales Tax Considerations

Aircraft sales tax varies by state and can range from 0% to 8%+ of purchase price. Common strategies to minimize sales tax include:

• • Registering aircraft in tax-friendly states (Montana, Delaware)
• • Using fly-away exemptions (taking delivery out of state)
• • Structuring purchase through LLC or trust
• • Claiming common carrier or interstate commerce exemptions

Financing Process & Timeline

Step 1: Pre-Qualification (Week 1)

Submit preliminary financial information to receive indicative terms. Pilothouse can provide pre-qualification within 48 hours based on credit profile and target aircraft.

Step 2: Aircraft Selection & LOI (Weeks 1-2)

Once you've identified a target aircraft, submit a Letter of Intent (LOI) to the seller. Financing contingency periods typically range from 30-45 days.

Step 3: Formal Application & Underwriting (Weeks 2-4)

Submit full application with supporting documentation:

• • Personal financial statement with supporting schedules
• • Last 2 years personal and business tax returns
• • Bank statements (last 3 months)
• • Aircraft purchase agreement or LOI
• • Aircraft specifications and logbooks

Step 4: Pre-Purchase Inspection & Appraisal (Weeks 3-5)

Coordinate pre-purchase inspection (PPI) with qualified maintenance facility. Lender orders independent appraisal. Budget $15,000-$35,000 for PPI depending on aircraft size.

Step 5: Closing & Funding (Weeks 5-6)

Execute loan documents, perfect security interest with FAA, bind insurance, and wire funds. Most aircraft closings occur at escrow companies specializing in aviation transactions (ACSF, Aerospace Reports, etc.).

Choosing the Right Lender

Aircraft financing is a specialized niche. Key lender categories include:

1. Specialized Aviation Lenders

Lenders exclusively focused on aircraft financing (e.g., Global Jet Capital, NBAA Finance). They understand aviation markets, offer competitive terms, and provide fast approvals.

2. Private Banks & Wealth Management Firms

High-net-worth banking divisions (JPMorgan Private Bank, UBS, Citi Private Bank) offer aircraft financing as part of broader wealth management relationships. Often provide relationship pricing and flexible structures.

3. Leasing Companies

Specialized aviation lessors (e.g., Air Partner, Jetcraft) provide operating leases and sale-leaseback transactions. Best for corporate buyers seeking off-balance-sheet treatment.