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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 |
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On Thursday, June 6, 2013 5:46:47 PM UTC-6, noel.wade wrote:
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. It's education. The SSA undertook to educate LCSB about the value of making sailplane loans. We all need to do the same with the banks who do airplane lending. Ask a loan officer to call LCSB and discuss the business. |
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