Aircraft Finance | Merchant West

Industry | Aircraft Finance

Aircraft Finance in South Africa

The Smart Way to Lift Off

For businesses searching for aviation loans in South Africa, there are smarter aircraft finance solutions that can be tailor made to suit specific requirements and capabilities.

Aviation assets are among the most expensive on a global scale, and when taking this into consideration, buyers need to be smart about how they finance these assets.

What Options Are Available to Businesses in Terms of Aircraft Financing?

A single aircraft, or a fleet, can be purchased using different payment options:

  • Cash

Buying an aircraft is expensive, many businesses therefore do not have the capital to buy these assets with cash. Even the businesses that do have this option may not want to hand over a large lump sum for a depreciating asset, but would rather keep the cash within the business.

  • Aviation Loans

Aviation loans may not offer businesses the same tax benefits as the other aircraft financing options. Depending on the loan conditions, payments may fluctuate and will not be fixed, which is risky, especially when interest rates rise. Loan options also tend to be less flexible than asset finance options.

  • Aircraft Finance Solutions (Asset Finance)

Specialised aircraft financing solutions offer businesses fixed payment terms throughout the lease period, there are also tax benefits and upgrade options. Finance solutions offered by aircraft finance specialists include operating leases, instalment sales and leaseback options.

How Does Aircraft Financing Work at Merchant West?

Operating Lease – Large or small aircraft financing can be done via an operating lease. An operating lease is complete off balance sheet funding which allows for zero depreciation to write off. The interest is also calculated on the capital amount excluding VAT. There is no ownership of the asset at the end of the period, businesses therefore pay for the use and not the depreciation. Note that there are also operating lease options available with ownership.

Instalment Sale – An instalment sale is where ownership is automatically transferred to the business once the final instalment has been received. Unlike with an operating lease, this method is treated as on balance sheet funding and the depreciation can also be written off.

Sale and Leaseback – With a sale and leaseback, businesses can sell the asset(s) back to the aircraft finance company and rent it back over the remaining lifespan. This allows businesses to still have use of the asset while freeing up cash.

Aircraft financing in South Africa is the smart way for businesses to gain access to aviation assets, how and when they need to.

What Makes Aircraft Financing from Merchant West So Smart?

Asset finance solutions are designed for ambitious businesses that wish to grow with best-practice financial risk management consciousness.

By financing aircrafts using the services made available by asset finance solution specialists, businesses gain access to a variety of benefits:

  • Working Capital is Preserved
  • Customised Solutions
  • Flexible Repayments
  • Tax Benefits
  • Low Rates
  • Access to Quality and Variety

What Assets Can Businesses Get Through Aircraft Financing?

From large to small aircraft finance, businesses can acquire a range of assets in a customised package, personally designed to suit the needs of each individual business. Aircraft finance can be used for the following:

  • Large International Commercial Jets
  • Private Business Jets
  • Fleet Aircraft
  • Regional Commercial Jets, and more.

Merchant West

A Partnership for Financial Success

At Merchant West, we offer flexibility in order to ensure that our client’s specific needs and capabilities are met with structured asset finance solutions. We offer a variety of personalised services, with a broad scope of expertise, to provide committed aircraft financing unique to the aviation industry. The solutions tailor-made by our dedicated specialists at Merchant West also include a fast and thorough analysis in order to fully understand different businesses before presenting the best solutions for any viable opportunity. Contact us at Merchant West for more information on our bespoke aircraft finance solutions, tailored for the ambitious and structured for growth.