Turboprop Financing: A Guide for King Air, Pilatus & TBM Loans

Stepping up to a turboprop is a significant milestone, offering major gains in speed, range, and capability. Whether for business or personal use, financing a high-performance aircraft like a Beechcraft King Air, Pilatus PC-12, or Daher TBM requires a more sophisticated approach than piston financing.

How Lenders View Turboprops

Lenders recognize turboprops as substantial assets, often used for business and generating revenue. The underwriting process is consequently more detailed:

• Focus on Use Case: Lenders will want to understand the aircraft's mission. Is it for personal travel, corporate transport (Part 91), or charter operations (Part 135)?
• Maintenance Status: Meticulous maintenance records are non-negotiable. Lenders will scrutinize engine times, inspection status (hot sections, overhauls), and any damage history.
• Borrower Financials: For turboprop loans, lenders look beyond credit scores to global cash flow, net worth, and liquidity. For business use, they will analyze company financial statements.

Structuring a Loan for a King Air, PC-12, or TBM

Loan structures for turboprops are more varied than for pistons:

• Loan-to-Value (LTV): Typically ranges from 80-85%.
• Amortization & Term: Amortization periods of 15-25 years are common, but loan terms are often shorter (5-12 years), resulting in a balloon payment.
• Fixed vs. Variable Rates: Both options are available. We help clients analyze the benefits of each based on their financial strategy.

The Importance of Professional Management

For many turboprop owners, particularly those using the aircraft for business, demonstrating professional management can be a key factor in securing financing. This includes having experienced pilots, a clear maintenance plan, and proper insurance coverage. Presenting a well-organized operational plan gives lenders confidence in the long-term care and value of their collateral.