On Jun 6, 4:14*pm, Bill D wrote:
"No can do" and "can do with a Personal Unsecured Loan at any reasonable bank" are contradictory statements. *Is it you can't get a loan, or you just don't like the interest rate on offer?

Bill - The issue is that aircraft-specific financing companies say "no
can do" when they discover the aircraft is a sailplane, not a
propeller-driven airplane. I can get loans for propeller-driven
aircraft all day long... I find it incredibly odd that they flatly
refuse to deal in sailplanes - but will happily finance prop-planes,
helicopters, and aircraft kits. They're willing to finance more-
complicated, higher-maintenance, more-costly-to-own assets that don't
necessarily have the same proven value-retention that Sailplanes do.
As for Personal Unsecured Loans: They are a different animal entirely
- its not _just_ a matter of interest rates. You're not putting up
any collateral, so you've got higher interest-rates _and_ shorter
terms. These combine to make monthly payments cost-prohibitive or
impractical. Aircraft finance companies will happily do 7-20 _year_
terms for a prop-plane; and at an interest rate that is 25% to 75%
_lower_ than a personal unsecured loan (which most banks cap at a 5
year term). Why is it that they won't do the same for a sailplane?

Let me put this another way: The reason people can afford homes is
because you take out a mortgage. The bank believes in the long-term
value of your collateral (your home) and thus is willing to do a very
long-term, low-interest-rate loan against it. Could you imagine trying
to buy a home on a 5-year loan term, at 10% interest? Its just not
practical for that size of asset. Aircraft finance companies treat
airplanes in a similar manner to the way banks treat homes. But they
_don't_ treat sailplanes in the same manner they treat airplanes.

For those recommending LCB (aka LCSB) - please see my NOTE in my
original post. I have been told that he is out of the office until
Monday. I'm not gonna call the guy's cell phone while he's on vacation
or out for personal reasons - I'll call on Monday and confirm my
options - but the staff's comments so far make me think its not going
to be super-appealing. And if the other bank staff are quoting me
improper interest rates or term lengths, then that's a problem they
need to address.

Finally: Even if LCSB _does_ offer glider loans that are comparable to
the aircraft loans we can get for prop-planes, I still find it
disturbing/sad that they are the sole major provider. Competition
would encourage better pricing (i.e. loan terms) and more choices for
consumers. If the business really is that good/profitable for them,
why aren't there at least a few other financing companies out there
who are willing to make "easy money"? Its not a volume business to be
sure, but neither is aircraft financing in general; and easy money is
easy money.

--Noel