The aviation industry is indeed one of the most important industries in any country. This industry is characterized by huge investments. Any domestic airline company or the commercial industry has to make huge investments in order to start or expand. It is quite obvious that there is a need for finance that has to be made in the industry. Each aircraft is bought for quite huge sum of money that runs into millions and billions. The aviation industry comprises the

various types of helicopters, aircrafts etc. As far as the finance for the aviation business is concerned, it is also required in huge amounts because of the cost of the aircrafts etc. Thus, not all the financial institution can provide finance for this and many a times, it has been noticed that two or more financial institution provide the finance to the aviation industry in a combined manner by forming the consortium loans etc. Let us discuss more about the aviation business finance in our next part of discussion.

Various Aspects of Aviation Business Finance

There are many aspects of the aviation business finance that a person should understand in order to understand the topic completely. First of all, is the tenure for which the finance is available. Though different financial institutions have different criteria regarding the aviation business finance, the maximum period that is allowed in the case of finance to the aviation industry is about 20-25 years. It also depends upon the quantum of finance available. The next aspect is the rate of interest. The rate of interest depends upon the quantum of finance taken for the purchase of the aircraft, helicopter etc. The rates in interest in the present times are about 5-8%. As far as the quantum of finance is concerned, the minimum amount of finance that has to be taken is generally $25000. Below this amount, the finance for the aviation business is not

available. Let us discuss about the various financial institutions that provide the finance to the aviation business in next part of our discussion.

The Providers of Finance for the Aviation Business

There are financial institutions that provide finance only for the specialist aircrafts in the General Aviation Industry whereas there are some financial institutions that provide finance for the commercial carriers. These financial institutions have also formal as well as informal arrangements with the renowned aircraft and helicopter suppliers so that there are no bottlenecks in availing the finance. Also, these finance providers have experts employed with them that coordinate between the suppliers as well as the buyers of the aircrafts. The finance options that are being provided by these institutions are also quite flexible so it can easily suit the individual needs of the buyer. So, it can be said that the providers of the business finance to the aviation industry operates by means of a network, which is well established.

Almost all the providers of the aviation business finance have an option on their websites by which a person can easily calculate the difference between the prices that he pays by means of cash and by availing the finance from the finance provider.

Before a person, corporate etc proceeds to avail the aviation business finance; he has to provide certain information to the provider of the aviation finance. It is on the basis of this information only that the financial institution will decider whether it can provide the finance or not.

The information that is generally sought by the providers of the aviation business comprises of:

Aircraft income analysis: A complete income that would be derived from the use of the aircraft has to be provided. This is because the repayment would be done from the earnings only and it is very essential for any financial institution that provides the finance for the aviation business to see whether there are enough earnings out of which the repayment is possible.

Business particulars: All the relevant information about the business in which a person, corporate etc is engaged has to be provided. This is because the financial institution is bound to obtain such information by law. Apart from the business particulars, the personal particulars are also to be given by a person. All the data about the business as well as the personal information is scanned first and only then, the decision is taken regarding the financing.

Asset and liability statement: A person, corporate etc has to provide an asset and liability statement also to the financial institution from which the finance for the aircraft etc is sought. This is done basically to ascertain the financial soundness of the borrower. The assets and liability statement shows all the assets that are possessed by a person or the corporate etc and it also includes all the liabilities that it has to pay in the near future or in the long term. The cash inflow statement is also required for making a decision by the financial institution.

Apart from this, there are many aspects that should be looked by the borrower in order to get the finance from the right institution. The first and the foremost is the rate of interest that would be charged. The rates are quite competitive and a comparison should be made about the rate of interest being provided by the various financial institutions. Apart from rate of interest, the type of customer service and the terms of conditions should also be given equal importance. One more aspect that needs to be understood here is that the financial institutions that provide loan for the aircrafts etc, provide these for the new as well as used aircrafts, helicopters etc. Thus, it is possible to get the finance for new as well as used aircrafts etc. These are some of the aspects that should be taken into consideration before applying for the finance for the purchase of aircraft etc.

Thus, it can be said that a person or a corporate can easily get the finance for the purchase of new as well as used aircraft or helicopter. All the information about business, personal information etc has to be submitted to the financing institution before the loan is granted. Also, there are some aspects that should be closely watched for before a person applies for the finance related to the aviation.