Re: Glider Financing

[Paul Cordell]

A Long long time ago I approached my employers Credit Union to finance a Sailplane. This well known Seattle Aircraft Manufacturers Credit Union bluntly told me that they don't finance Aircraft.....

[Kevin Finke]

Paul, that's funny.

Since then they do now finance aircraft, but not sailplanes. It was
really kind of funny because the Everett Branch had a sailplane
hanging in the lobby with a picture of it flying down below and an
advertisement saying that they now offer aircraft financing. I pursued
them for my first glider purchase and got as far as the question "How
much horsepower?" and when I said zero, they looked at me weird, and
said they don't finance aircraft without engines. I tried to call them
out on it's still an aircraft per the FAR's, and you advertise
aircraft financing.

My honest guess is they are using prepackaged financing software where
the horsepower of the aircraft somehow relates to it's value, and when
they can't put a number in it, they just freak.

-Kevin

[Tony[_5_]]

On Tuesday, June 11, 2013 12:09:08 PM UTC-5, Kevin Finke wrote:
> Paul, that's funny. Since then they do now finance aircraft, but not sailplanes. It was really kind of funny because the Everett Branch had a sailplane hanging in the lobby with a picture of it flying down below and an advertisement saying that they now offer aircraft financing. I pursued them for my first glider purchase and got as far as the question "How much horsepower?" and when I said zero, they looked at me weird, and said they don't finance aircraft without engines. I tried to call them out on it's still an aircraft per the FAR's, and you advertise aircraft financing. My honest guess is they are using prepackaged financing software where the horsepower of the aircraft somehow relates to it's value, and when they can't put a number in it, they just freak. -Kevin

you just need a motorglider...

[Dan Marotta]

Did we decide not to explore parterships or syndicates?

Back in '92 two of us sold our gliders (an ASW-19 and a G-102) and bought an
LS-6a which neither of us could have afforded alone. With the sale of the
two gliders, he was set and I had to add $500. We drove together from
Denver to Chicago to pick up our purchase and we had a great time for the
next 5 or 6 years.


"Paul Cordell" > wrote in message
...
>A Long long time ago I approached my employers Credit Union to finance a
>Sailplane. This well known Seattle Aircraft Manufacturers Credit Union
>bluntly told me that they don't finance Aircraft.....

[noel.wade]

Dan -

This is not about "ways to finagle glider ownership".

It's about this being another barrier to entry in a sport that has too many already. It's about a ridiculous situation that doesn't exist for almost any other type of recreational vehicle. There is NO REASON why a person should be forced into any of these "alternate solutions", just to try to accomplish what any Joe-Schmoe can already do with a car, airplane, motorcycle, boat, or RV.

--Noel

[Peter von Tresckow]

Bill D > wrote:
> On Tuesday, June 11, 2013 11:45:07 AM UTC-6, noel.wade wrote:
>
>
>> It's about this being another barrier to entry in a sport that has too
>> many already. It's about a ridiculous situation that doesn't exist for
>> almost any other type of recreational vehicle. There is NO REASON why a
>> person should be forced into any of these "alternate solutions", just to
>> try to accomplish what any Joe-Schmoe can already do with a car,
>> airplane, motorcycle, boat, or RV.
>
>> --Noel
>
> Of course, you're right. You've hit on a obstacle to growth. So, what
> can we do about it? I don't think financial institutions "hate" us as
> much as they're ignorant of us. Like most people, they react negatively
> to things they don't understand.
>
> Lea County State Bank obviously thinks it's good business for them.
> That's something we might try to replicate through education of bankers.
> Given a workable plan, I'm sure the SSA Growth and Development Committee
> would consider undertaking the task.

So what kind of terms does Lea County Bank offer? Do they do small loans? A
friend of mine was looking at possibly buying a small taildragger <30k, and
most banks said they don't do small loans. They would gladly loan him
80-100k but nothing small.

Pete

[Bill D]

On Tuesday, June 11, 2013 12:43:03 PM UTC-6, Bill D wrote:
> On Tuesday, June 11, 2013 11:45:07 AM UTC-6, noel.wade wrote:
>
>
>
>
>
> > It's about this being another barrier to entry in a sport that has too many already. It's about a ridiculous situation that doesn't exist for almost any other type of recreational vehicle. There is NO REASON why a person should be forced into any of these "alternate solutions", just to try to accomplish what any Joe-Schmoe can already do with a car, airplane, motorcycle, boat, or RV.
>
>
>
> > --Noel
>
>
>
> Of course, you're right. You've hit on a obstacle to growth. So, what can we do about it? I don't think financial institutions "hate" us as much as they're ignorant of us. Like most people, they react negatively to things they don't understand.
>
>
>
> Lea County State Bank obviously thinks it's good business for them. That's something we might try to replicate through education of bankers. Given a workable plan, I'm sure the SSA Growth and Development Committee would consider undertaking the task.


Answering my own post after a bit of research.

There is the American Bankers Association with a publication, "ABA Journal".. Perhaps we have someone with enough financial credibility (John Cochrane?) to write an article about a new banking opportunity financing gliders. "No defaults in 50 years" sound pretty convincing to me.

[noel.wade]

> So what kind of terms does Lea County Bank offer? Do they do small loans? A
> friend of mine was looking at possibly buying a small taildragger <30k, and
> most banks said they don't do small loans. They would gladly loan him
> 80-100k but nothing small.
>
> Pete

Peter -

There are dozens of aircraft finance outfits around the country. Just
Google "Aircraft Loan" and you'll find several. Or call AOPA and ask
for their new aircraft finance division. They'll happily do loans of
that size (as long as the airplane isn't registered as a glider). :-P

--Noel
P.S. I'm about to get a call back and an answer on LCSB's current
terms. But when I checked a couple of years ago they were not all that
good...

[noel.wade]

On Jun 11, 11:43*am, Bill D > wrote:
> On Tuesday, June 11, 2013 11:45:07 AM UTC-6, noel.wade wrote:
> > It's about this being another barrier to entry in a sport that has too many already. It's about a ridiculous situation that doesn't exist for almost any other type of recreational vehicle. There is NO REASON why a person should be forced into any of these "alternate solutions", just to try to accomplish what any Joe-Schmoe can already do with a car, airplane, motorcycle, boat, or RV.
> > --Noel
>
> Of course, you're right. *You've hit on a obstacle to growth. *So, what can we do about it? *I don't think financial institutions "hate" us as much as they're ignorant of us. *Like most people, they react negatively to things they don't understand.
>
> Lea County State Bank obviously thinks it's good business for them. That's something we might try to replicate through education of bankers. *Given a workable plan, I'm sure the SSA Growth and Development Committee would consider undertaking the task.

Bill -

My plan is to get all the details from LCSB and then go back to the
AOPA Aircraft Finance guy. I'll lay it out to him and let him know
that ANY aircraft finance company out there could dominate the market
if they offered slightly longer terms or a 1% lower interest-rate than
LCSB. We'll see where it goes. Personally, I don't think the SSA has
positioned itself to have _any_ clout with banks or finance companies
or anything; AOPA/EAA seem like a much better bet when it comes to
this sort of issue.

--Noel

[son_of_flubber]

On Tuesday, June 11, 2013 3:06:39 PM UTC-4, noel.wade wrote:
> I'll lay it out to him and let him know
> that ANY aircraft finance company out there could dominate the market
> if they offered slightly longer terms or a 1% lower interest-rate than
> LCSB.

Not that I think your plan would work, but helping to kill LCSB's glider loan business to get slightly better terms from a "big aircraft finance company" just so that big company can decide a few years later to STOP financing gliders sounds like the wrong plan. Big companies are rarely interested in small and shrinking opportunities.

The status quo is better than no quo.

[Bob Whelan[_3_]]

Apparently it's difficult to obtain financing on pricey glider toys whose
owners rarely default when financing actually was available and obtained. I
agree this is a(n unfunny) ludicrous situation and definitional business
opportunity in our declining bastion of free market competition.

But - apologies up front for thread drift - all seems not yet lost.

Today's mail included a flier from Dell in which I learned I can finance a
$3,200.00 computer, pay only $96 per month, and actually own the computer in...
..
..
..
..
..
..
..
..
..
..
.. ...*31 years* with a total cash outlay of only $15,903.22. Is America a
Great Country or what?!?

Bob - sorry Noel, it was too good to not share! - W.

[Bill D]

On Tuesday, June 11, 2013 1:06:39 PM UTC-6, noel.wade wrote:
> On Jun 11, 11:43*am, Bill D > wrote:
>
> > On Tuesday, June 11, 2013 11:45:07 AM UTC-6, noel.wade wrote:
>
> > > It's about this being another barrier to entry in a sport that has too many already. It's about a ridiculous situation that doesn't exist for almost any other type of recreational vehicle. There is NO REASON why a person should be forced into any of these "alternate solutions", just to try to accomplish what any Joe-Schmoe can already do with a car, airplane, motorcycle, boat, or RV.
>
> > > --Noel
>
> >
>
> > Of course, you're right. *You've hit on a obstacle to growth. *So, what can we do about it? *I don't think financial institutions "hate" us as much as they're ignorant of us. *Like most people, they react negatively to things they don't understand.
>
> >
>
> > Lea County State Bank obviously thinks it's good business for them. That's something we might try to replicate through education of bankers. *Given a workable plan, I'm sure the SSA Growth and Development Committee would consider undertaking the task.
>
>
>
> Bill -
>
>
>
> My plan is to get all the details from LCSB and then go back to the
>
> AOPA Aircraft Finance guy. I'll lay it out to him and let him know
>
> that ANY aircraft finance company out there could dominate the market
>
> if they offered slightly longer terms or a 1% lower interest-rate than
>
> LCSB. We'll see where it goes. Personally, I don't think the SSA has
>
> positioned itself to have _any_ clout with banks or finance companies
>
> or anything; AOPA/EAA seem like a much better bet when it comes to
>
> this sort of issue.
>
>
>
> --Noel

Noel, I think the only thing AOPA/EAA will do is cut off glider loans in hopes we come to our senses and start flying airplanes. The airplane guys just think we're weird. A far better business relationship would be with a bank who finances jet skies.

[noel.wade]

LCSB Loan terms:

7 years, 8% - 10% fixed rate
OR
7 years, variable interest at Prime + ~3.5% (currently just over 6%).

I'm sorry, but this is crap compared to airplane finance companies who
are offering 7-15 year terms (20 years if you buy something "big") and
_fixed_ interest rates in the 4% to 6% range.

Personal loans from Banks and Credit Unions are typically in the 6% -
10% range and up to 5 years (with 7 years available in a few cases).

Sooooo, LCSB is charging what you'd expect for an unsecured (personal)
loan but they get the benefit of having collateral (and the buyer has
the hassle of a lien on the title to manage). They seem like nice
people at LCSB, but really this is _NOT_ a good deal for buyers at
all.

--Noel

[Rob Brown[_2_]]

On 2013-06-11, Bill D > wrote:
>
> Noel, I think the only thing AOPA/EAA will do is cut off glider
> loans in hopes we come to our senses and start flying airplanes.
> The airplane guys just think we're weird. A far better business
> relationship would be with a bank who finances jet skies.

What's a jet sky?


--

Rob Brown