In pilot speak, we trust but we also verify. Lenders do the same when considering an applicant for an aircraft loan. NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, discusses aircraft loans and bank statements.
Filling out a personal financial statement during the initial loan application process is one indication of the buyer’s financial stability and ability to pay, but it’s just one point in a vast universe of data. The lenders are looking to form all your data into a cohesive line indicating you have the financial resources to own and operate an aircraft.
The old saying goes, “Two points make a line.” Many people confuse income and liquidity and try to complete that “line” with their tax returns as evidence they can make the monthly payment. The challenge with this idea is that taxes only provide evidence of your taxable income level. They do not confirm your level of liquidity.
This article was originally published by AOPA Aviation Finance Company on February 2, 2023.
