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Author Topic: Financing A Twin Commander Outcome - N690GF (690B -10)  (Read 1952 times)

aholmes100

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Financing A Twin Commander Outcome - N690GF (690B -10)
« on: June 06, 2021, 06:11:23 am »
Just finally closed on N690GF. I had posted back in April,2021 about financing N690GF. Bruce Byerly was helping me with the purchase of the aircraft. Thought I would post an update may be helpful to some folk that may be in the market for Twin Commander.

I purchased a Piper Matrix back in 2018 at the time I did not even have a PPL. I finished my PPL in an Archer then did all my IFR training in the Piper Matrix. Flew that for about 550 hours and decided to upgrade to Twin Commander 690B. Piper Matrix with the Release R9 was a great airplane but an airplane with a lot of limits. Buying the first airplane was an interesting experience.

I am in the real estate investment business and have owned a pretty sizable portfolio of properties with a huge amount of equity and we continue to buy. Never been turned down for a loan on real estate but buying an aircraft the financing is looked at a bit differently. I clearly did not know that. I had a lot of cash sitting in properties that I own free and clear but as Adam Frisch pointed out your assets don't count. I had to show other accounts with a lot of cash which I never have to when it comes to real estate but I am not in the airplane business so I just did not know what they were looking for.

AirFleet Capital did the loan on the Piper Matrix with 15% down. Since I had paid off that airplane off in 2 years I thought they would be happy to underwrite the loan on the Twin Commander. The answer was - we would love to do the financing but just buy a jet and we can finance it. Twin Commander due to the older airframe could not be financed.
So I went to a few more places but all of them either said no or after 2 weeks came back with the same answer. Just buy a jet. Finance is not a problem for a jet or a newer a turbine airplane but not for an older airframe on the Twin Commander.

At times I doubted my own judgement if I was making the right choice in buying a 690B. According to Bruce a pair of -10 with 800 hours great engine times newly overhauled props. Dual Garmin 600 panel, GTN 750 & 650 with 2100 auto pilot is a great setup. I couldn't find anything that would do what a 690 could do for the money. I considered buying a M500 and a CJ. The M500 would be easy to get trained in since I had a Piper Matrix. CJ would be tough with only having 600 or so total hours. Plus the CJ1 would not even get me from Chicago to Fort Myers with four or five people and bags without a stop for fuel. I decided to stick with the 690B. From the research I did I could not find anything that would do what a 690B could do for the money both in terms of the purchase price, fuel burn & expected maintenance. I would have to spend significantly more money on purchase and fuel etc.

That lead to my post in April, 2021 on the forum trying to see if there were any resources. Mark S. & Adam Frisch both pretty much suggested to go to the local bank. I had almost decided to pay cash for it but it didn't make sense to do that. I ended up going to the bank I have done business with for years they know me and as Adam suggested they know the assets and are willing to read the balance sheet rather than just the taxable income. I just seemed crazy that even though I had enough cash sitting in the business that could have paid for the airplane 4 or 5 times over with no debt on the business the lenders would not even look at the airplane because of the year of airframe.

In the end my local lender ended up doing the loan. Like Mark S. suggested the chairman of the bank is a pilot and owns a jet and he was willing to do the loan. Even though they do not typically do aircraft loans I guess they knew us and did not have any issue.

The terms were as follows.
30% down. 4.5% with a 10 year term.

Probably not the best terms but I did not care at this point. Fortunately I was not that downpayment, rate or term sensitive financially but did not know that financing an older airframe would be such a headache. Fortunately as soon as I submitted the app I was able to get them moving pretty quickly. Just wanted to thank Mark S. & Adam Frisch for their suggestion. I had not considered just asking my local bank that had a long term relationship.

I just wanted to post this in the hope that it may help anyone else looking for financing on an older airframe. I am new whole aviation industry and as an aircraft owner to begin with and totally new to the Twin Commander world. May be it's just me but I suspect that many folks may run into the same issue I did.
« Last Edit: June 06, 2021, 06:16:54 am by aholmes100 »

SKYFLYER

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Re: Financing A Twin Commander Outcome - N690GF (690B -10)
« Reply #1 on: June 06, 2021, 12:43:57 pm »
TOTALLY AWESOME POST... THANK YOU... AND WELCOME TO THE COMMANDER WORLD

I have heard this story from several others in the past few years. Seems the "airplane" finance folks only want to write what they think the PILOT should be flying.

While the banking relationships (business) most always are where you can get it done (most any financing) they have been strained in the last decade due to banking oversite regulations. Right or wrong that has made many banks less workable, but having a solid relationship with an executive at your bank is most always better than being a newbe with anyone else.

Regardless you should be feeling pretty good.

Adam Frisch

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Re: Financing A Twin Commander Outcome - N690GF (690B -10)
« Reply #2 on: June 06, 2021, 04:09:41 pm »
Glad it worked out! Banks will lend you an umbrella when it's sunny outside, and want it back when it's raining. I can honestly say I want as little as possible to do with them at this point in my life.
Slumming it in the turboprop world - so you don't have to.

Kzastrow1

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Re: Financing A Twin Commander Outcome - N690GF (690B -10)
« Reply #3 on: June 06, 2021, 05:40:01 pm »
Great post.  The only debt I’m willing to carry anymore is aircraft debt.  My local community bank where I developed a long lasting relationship gives me100% financing at a very competitive rate with a 20 year amortization.  Most recently on my 1969 MU2.  It’s all about the relationship. 

donv

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Re: Financing A Twin Commander Outcome - N690GF (690B -10)
« Reply #4 on: June 06, 2021, 08:17:08 pm »
That is great! The crazy thing is that a newer jet is a depreciating asset, while the Commander will generally hold it's value. So from a financing point of view, the Commander should be much easier, but the banks don't seem to see it that way.