Financing Experimental & Homebuilt Aircraft: What You Need to Know

The world of experimental and amateur-built aircraft offers incredible innovation and value. However, financing an experimental aircraft is one of the most challenging areas of aviation lending. Many banks will not finance non-certified aircraft, but a handful of specialized lenders will, provided the aircraft and buyer meet their strict criteria.

The Lender's Perspective: Managing Risk

The primary concern for lenders is risk. Unlike certified aircraft (like a Cessna or Piper), experimental aircraft do not have a standardized manufacturing process. This creates uncertainty about build quality, safety, and resale value. Lenders need to be confident that the aircraft is well-built, well-maintained, and will hold its value.

What Makes an Experimental Aircraft "Financeable"?

A small subset of the experimental market is eligible for financing. Lenders will look for:

• Popular, Proven Kits: Lenders are far more likely to finance a well-known kit with a long track record, such as a Van's RV, Glasair, or Lancair, than a one-off custom design.
• Professional Build Quality: Even if amateur-built, the aircraft must be constructed to professional standards. A professional builder assist program can add significant credibility.
• Meticulous Records: Complete and detailed builder's logs, maintenance records, and component documentation are absolutely essential.
• Strong Borrower Profile: The borrower must have excellent credit and a strong financial position to offset the perceived risk of the asset.

The Crucial Role of the Appraisal and Pre-Buy

For an experimental aircraft loan, the appraisal and pre-buy inspection are even more critical than usual. The lender will rely heavily on an experienced appraiser to determine the aircraft's fair market value. Furthermore, the pre-buy inspection must be conducted by a mechanic with deep expertise in that specific aircraft type. A clean, thorough pre-buy report is often the key to getting the loan approved.