Last updated: • Not financial advice
Why Turboprops Finance Well
Popular turboprops like the Pilatus PC‑12, Daher TBM series, and Beechcraft King Air maintain deep secondary markets, which supports lender comfort. Liquidity and mission flexibility often translate to competitive rates and stronger LTV compared to niche airframes.
Underwriting Expectations
- Credit & liquidity: Strong personal or corporate financials; reserves for engine programs and maintenance.
- Usage: Part 91 is straightforward; Part 135 requires more documentation and sometimes tighter terms.
- Collateral: Airframe/engine times, avionics, damage history, and program participation.
Typical Structures
- Terms: 7–15 years depending on age and use.
- LTV: Often 70–85% for mainstream models and vintages.
- Payment cadence: Monthly is common; quarterly aligns with business cycles.
- Balloons: 10–30% at maturity to manage payments and preserve flexibility.
Examples
PC‑12 NG
Strong demand supports attractive terms. Pair a 10‑year amortization with a modest balloon to maintain liquidity for avionics and interior refreshes.
TBM 850/900
Speed and owner‑pilot appeal drive liquidity. Consider fixed vs variable tradeoffs and quarterly payments if income is seasonal.
King Air 200/350
Corporate and charter missions create broad demand. Ensure maintenance programs and documentation are in order for smoother underwriting.
Modeling Workflow
- Set budget with the calculator; test term length, cadence, and a 10–20% balloon.
- Compare fixed vs variable paths under Base/High/Low rate scenarios.
- Stress resale assumptions; confirm balloon take‑out options (refi vs sale).
What Moves Pricing
- Market cycles and credit spreads; follow FRED benchmarks and SOFR.
- Collateral condition and program participation.
- Borrower strength, liquidity, and usage profile.
Documentation Checklist
- Financial statements and tax returns (personal/corporate).
- Aircraft logs, engine/prop times, AD/SB compliance.
- Avionics/options lists; photos; maintenance program docs.
- Title search and registration checks via FAA registry.
Operating Cost Planning
Integrate debt service with realistic operating budgets: fuel, maintenance (including engine reserves), hangar, and insurance. A payment that fits on paper but ignores reserves is fragile. Consider quarterly cadence if revenue is seasonal and maintain a runway for unexpected MX.
Related Articles
External references: FAA Registry · FRED rates · NBAA