Updated . Educational only — not tax, legal, or lending advice. Confirm figures with your CPA, the state revenue department, and a lender before you close.
The Invoice Is Not the Appraisal
Loan-to-value uses the appraised value of the airplane as it will be delivered, not the sum of the airframe plus every invoice you paid. Which modifications lenders will even finance is on avionics, engine, and interior STCs. The funding sequence is on how to finance an STC.
The usual gap
A glass panel or an engine overhaul can add real value. It rarely adds a dollar of value per dollar of invoice, because part of the invoice is labor the next buyer will not repay in full, and because comps may already assume a modern panel. Interior and paint add even less to what a lender will advance. Ask the appraiser for two numbers if the work is not done yet: as-is, and as-completed subject to the shop’s quote and the STC list. The lender uses the number they believe, then multiplies by their maximum advance.
A numeric way to see it
Price $300,000. Panel invoice $80,000. If the after-mod appraisal is $340,000 and the lender advances 80%, the maximum loan is $272,000. You are not financing the full invoice. The difference is cash. Run that loan, not the $380,000 hope, in the calculator.
Undocumented modifications do the opposite. They give the appraiser and the insurer a reason to cut value or to decline. If it is not in the logbooks with the 337 or the STC, it is not collateral.
Questions buyers actually ask
Should I install the panel before or after the appraisal?
If the loan depends on the panel, the appraisal must state the as-completed value and funding must wait until the work and the log entry exist.
Does an STC always raise value?
No. A modification the buyer pool does not want can narrow resale. Ask a broker who sells that model, not the shop that wants the work.