AvBuyer Magazine July 2016

Page 30

Finance July16.qxp_Finance 21/06/2016 10:21 Page 1


Financing Older Aircraft: Lessons from a Company Bucking BizAv Lending Trends

Martin Ormon, founder of Aircraft Finance Corp, has been financing older aircraft for clients since before the 2008 recession. Dave Higdon discusses his successful business model centered on a niche few other lenders will consider‌


hose with memories of the business aircraft market in 2007-2008 will remember one of the factors that undercut residual values: A steep decline in financing options for aircraft aged 1014 years, and the near-total collapse in loan opportunities for aircraft aged 15-plus. Loans on aircraft older than 10 years required significantly higher down-payments, came with shorter terms, and commanded higher interest rates. For aircraft older than 20 the bar rose even higher. Overall, money to finance anything but factory-new was scarce. For those who found any options, they were expensive. While conditions in the business aircraft market have improved markedly in the years that followed, loans on older business aircraft didn't



return to the levels and terms before the current market glut brought a slowdown in pre-owned aircraft transactions. Meanwhile, beginning before the downturn, through the slump and into better times, one company has been offering terms and rates on older jets and propjets. Aircraft aged 10, 20 even almost 30 years old are all part of its loan portfolio. Martin Ormon, Founder of Californiabased Aircraft Finance Corporation, is committed to providing clients with highly competitive rates, with highly competitive loan programs and a highly personalized service.

The Accidental Banker

At age 27, Ormon founded a successful hedge fund in 1992 after getting started in the field


Aircraft Index see Page 161