Updated . Educational only — not tax, legal, or lending advice. Confirm figures with your CPA, the state revenue department, and a lender before you close.
Three Ways to Pay, Three Things That Can Go Wrong
Choose the funding source whose failure mode you can live with. Broker versus lender is a different question: who funds the note.
Cash
No lien, no covenants, no approval. You still insure, maintain, and may owe sales or use tax. The risk is concentration: a large fraction of your liquidity is now a depreciating machine. If that leaves you unable to pay an overhaul, cash was not cheaper.
Aircraft loan
The airplane is the collateral. The FAA filing, the insurance loss payee, and the covenants are the cost of spreading the price out. Model it in the calculator. If you default, the lender can take the aircraft and may still pursue a deficiency. You keep your securities portfolio if you did not pledge it.
Line of credit
A securities-backed or home-equity line is not an aircraft loan. The collateral is the account or the house. A market drop can trigger a margin call or a freeze while you still own an airplane you cannot quickly sell. The rate may float. The line can be reduced. It can be a reasonable tool for a short-term bridge if you understand that call risk. It is a bad tool if the only way the purchase works is if markets never fall.
Questions buyers actually ask
Is cash always the cheapest?
It avoids interest. It does not avoid insurance, maintenance, or the chance you needed that cash for something that cannot be sold in a week.
Can I use a line for the down payment?
Sometimes. Tell the aircraft lender. They will ask whether the down payment is borrowed. Hiding it is worse than disclosing it.