Finance for Aviation (Kiwi Flyer Magazine)
03 August 2023
In the same way that you go to a specialist insurer when it’s time to arrange insurance on your aircraft, it is often beneficial to go to a specialist lender when seeking finance in support of an aircraft acquisition or an aviation related business. One such lender with a significant presence in the New Zealand aviation market is UDC Finance. In this article, UDC explains how best to approach arranging aviation-related finance based on what they have heard clients and the general industry say, as well as some of the common structures that they regularly put in place to support New Zealand aviation businesses.
As an aircraft owner or operator, what should you be thinking about when it comes to finance? To help support a finance application, there are certain conversations you could be having with your financial advisor. Understanding your numbers and being able to communicate your story better will enable any funder to better assist you and your business.
Five questions you can ask at this time are:
- Was your turnover last year the same, better or worse than previous years, and why was that?
- What did that mean for your gross profit? Sometimes you need to ask yourself honestly, are you busy just for the sake of being busy?
- What did your fuel costs look like versus previous years?
- Are your repairs and maintenance costs up, and is this a sign that you need to be putting money aside for unscheduled maintenance, new aircraft and/or components?
- Have you considered adding a FAF, or Fuel Adjustment Factor, to your rates or have you investigated a renegotiation of rates?
Once you have spoken with your advisor and have a good grasp of your current financial situation, UDC can meet with you to see what finance packages are available to suit your business needs.
UDC has been helping aircraft owners and operators with fixed wing and helicopter purchases, refinancing, and maintenance planning for over 85 years. During this time, UDC has acquired an extensive knowledge of the aviation industry, such that the company has the confidence to offer a range of financial solutions to help you grow your aviation businesses. UDC understands the importance of planning for the replacement of engines, blades and other core components, and can also fund these components when they are offshore, assuming there is equity in New Zealand. UDC has money to lend aviation businesses and is keen to grow its involvement in this industry.
UDC can assist you to replace and/or upgrade your assets onshore by providing:
- Assistance with machine importation requirements
- Flexible pre-approved revolving credit facilities
- Facilities that only utilise the asset being financed as security, not your home
- A choice of variable or fixed interest rates
- Flexible facilities to allow drawdown when required and to use spare cash to offset interest costs
- A specialised package of solutions to assist businesses whether you are an owner operator or a large corporate
- A thorough understanding of the types of aircraft utilised in the industry and current trends
- The ability to upgrade to new technology with minimal capital investment
- Extended loan repayment terms to match your cashflow and reflect the extended life of most aircraft types.
If you visit the Aviation Finance page, you will find some useful information there. UDC has representatives up and down the country so you will be able to get in touch with your locally based rep, who understands your region, to have a chat and take it from there.
This article is intended as general market commentary and does not constitute financial advice.