Ownership Structure and Aircraft Financing: Why Planning Ahead Matters
When purchasing an aircraft, one of the most important early decisions is determining how the aircraft will be owned. Your ownership structure is more than just a legal formality—it can directly impact taxes, financing eligibility, liability considerations, and even the timing of your closing.
Because of this, prospective buyers should involve qualified aviation tax and legal professionals early in the acquisition process. A knowledgeable aviation tax consultant can help structure ownership in a way that supports your operational goals while remaining compliant with federal, state, and FAA regulations.
Your Ownership Structure Impacts Financing
One detail many buyers don’t realize is that ownership structure can significantly affect lender eligibility.
Each aviation lender has its own requirements regarding acceptable borrower entities, and those requirements can vary widely. Some lenders are comfortable with more complex ownership arrangements, while others prefer straightforward, single-purpose entities.
Understanding your ownership structure early helps ensure you’re paired with a lender that can support it—reducing the risk of delays later in the transaction.
Why Timing Matters
At AvCap Financial, we’ve seen an increasing number of buyers form ownership entities after receiving financing pre-approval. While this may seem like a simple administrative step, it can create unexpected complications.
In some cases, the lender that issued the original pre-approval may not be able to lend to the newly formed entity due to internal underwriting restrictions or entity requirements.
When that happens, buyers may need to restart the financing process with a different lender. That can lead to:
- Delays in closing timelines
- Additional documentation requests
- A second credit pull
- Unnecessary stress during the acquisition process
Planning ahead can help avoid these setbacks.
Complex Structures Require Early Communication
If your planned ownership structure involves a multi-member LLC, trust, holding company, leaseback arrangement, or another customized setup, it’s especially important to communicate those details upfront.
The earlier AvCap understands your intended structure, the better we can align you with lenders experienced in handling those types of transactions.
Proactive communication helps avoid last-minute surprises and creates a smoother path from pre-approval to closing.
Build the Right Team Early
Aircraft acquisitions often involve several moving pieces—tax planning, legal structure, financing, insurance, and operational considerations all need to work together.
By involving the right professionals early in the process, buyers can create a more efficient acquisition strategy and avoid preventable delays.
The more proactive you are about ownership structure planning, the easier it becomes to align the legal, tax, and financing aspects of the transaction—and ultimately make aircraft delivery a much smoother experience.
Need Guidance on Ownership Structure?
AvCap Financial regularly works alongside aviation tax and legal professionals to help buyers navigate the financing process. If you need a referral to a trusted aviation tax consultant or want to discuss how your ownership structure may impact financing, our team is happy to help.