Episode Summary
Aircraft financing looks like a simple rate-shopping exercise… until you’re the one stuck in a bad structure, a surprise covenant, or a refinance that won’t clear because the original valuation doesn’t hold up.
In this long-form, name-names episode, Jason breaks down how aircraft lending really works (spoiler: lenders underwrite exit liquidity, not your dream), the difference between banks, finance companies, capital/private credit, and credit unions—and where brokers add real value vs. hidden cost.
Jason also shares a curated list of active finance brokers he consistently sees execute clean transactions across market cycles, then closes with the mistakes that cost owners the most after closing: non-USPAP “valuations,” replacement-cost thinking, balloons, and covenants nobody reads.
Get the complete list of VREF-Recommended Brokers and Lenders in downloadable format at:
vref.com/resources
What You’ll Learn
- Why aircraft lending is nothing like residential mortgages
- The concept lenders actually care about: exit liquidity
- Why the airplane is “conditional collateral” (and what else is being underwritten)
- Why identical borrowers can get wildly different terms on the same aircraft
- The differences between:
- Major banks
- Regional/tier-two banks
- Specialty lenders/finance companies
- Private credit/capital firms
- Credit unions (and why airline credit unions are a cheat code for pilots)
- When a broker helps—and when a broker is just friction + embedded cost
- How brokers get paid (and why “free” is rarely free):
- Bank-paid points
- Rate spread
- Double-dipping (bank points plus borrower fees)
- Why commercial-use lending is an entirely different universe
- The two lender/broker categories Jason says consistently create problems (without naming names)
- When going direct to a bank beats using a broker—especially for refis
- The “Big Four” requirements that separate consistent aviation lenders from everyone else
- Why structure beats rate shopping (especially with SOFR-based pricing)
- Practical examples: how terms/LTV/rates change at $5M, $500K, and $250K aircraft price points
- The real “gotchas” that explode later:
- Non-USPAP valuations
- Replacement cost =/= market value
- Balloons
- Covenants (where the real pain lives)
- Why now can be a strong refinancing window—and how to structure for optionality
COMPLETE PODCAST AND SHOW NOTES CAN BE SEEN AT https://vref.com/podcast/
Tactical Takeaways
- Use a broker when access is the problem (small/older/non-standard aircraft, thin deals, commercial use, weaker credit, outside your banking relationships).
- Call to Action
- Get the complete list of VREF-Recommended Brokers and Lenders in downloadable format at: vref.com/resources
- For help getting pointed to the right lender/broker: Jason@VREF.com
For valuations, appraisals, and VREF Online: VREF.com
