My friend and I (both members of AOPA) now each own 50% of an LLC that owns a debt free Piper Cherokee. We plan to sell the Piper and buy a used Cirrus SR20 after Covid, hopefully later this year. We will finance.
However, we’ll have an asymmetric property – I can own $ 270,000 and my friend can own $ 70,000 of the LLC, including his Cirrus asset (assuming we buy one for $ 340,000, for example). I can pay the down payment part (10% or 20%?) And finance my remaining part. We will therefore restructure our LLC arrangement. We both have excellent credit scores and credit histories and will be approved for our amounts.
Question: Can the LLC have a 20 year loan with us as co-signers? Can a Bank Loan be an LLC? Or will we each need direct personal loans outside of the LLC, but with the LLC (or the aircraft itself) listed as a secured asset as collateral?
Reply: Thank you for contacting AOPA Finance.
We work as a broker and have several lenders to consider. All lenders will treat the LLC like the borrower and use the aircraft as collateral. In addition, the lenders will require that all members of the LLC personally guarantee the loan. Depending on the lender, you may appear on the loan documents as guarantors or co-borrowers with the LLC.
Regardless of your respective ownership percentages, most lenders require that each partner be eligible for the full loan amount. Once we receive your application packages, we will review the financial information to make sure you meet the minimum requirements of our lenders and then identify the best loan option for you.
Let me know when you’re ready to go ahead with a purchase and I’ll be happy to help. Call us at 800.627.5263.
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