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Author Topic: Qualification For a Loan  (Read 749 times)

Offline Sad-anorak

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  • Posts: 49
Qualification For a Loan
« on: January 12, 2012, 11:59:57 AM »


Hi,

   Could anybody say what the criteria are for obtaining a loan please?

My airline is over 1yrs old, I have 6 aircraft of two types, average age
of A/C 3.6yrs, Brand image of 40, a Punctuality rate of 94.6 and load
factor of 81.5 plus my airlines worth is -$900K.

   Is it just the fact of the airlines worth being negative, but my rating
is CCC, I have missed out on a 737 today by about $10k short in my
cash ( cash is in the black ), but I couldn't get a loan and now the
aircraft has gone and I still have a CCC rating???? an Ideas please???


Cheers,


Steve.

Offline Sami

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    • AirwaySim - Are you the next Richard Branson?
Re: Qualification For a Loan
« Reply #1 on: January 12, 2012, 03:13:14 PM »
Things such as punctuality, aircraft age, load factors etc. are irrelevant in respect of financial loans.

Affecting things to Credit Rating (among others) are airline age, company image, and overall wealth (value/money/incomes). And credit rating in turn affects to the amount of available loans, and takes into account what loans you have already etc.

You can loan already $15 million if you have collateral to it, which is a big sum when compared that you have only 6 leased planes and monthly revenue about $6 million and profit levels hovering around both sides of zero level. Unsecured loans are always more restricted as they are very risky to the investor.

Offline Sad-anorak

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Re: Qualification For a Loan
« Reply #2 on: January 12, 2012, 03:46:24 PM »


Hi,

   Thanks for that, I'll try to increase the profit margin and just watch the markets,

Cheers,

Steve.

Offline TranceAvia

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Re: Qualification For a Loan
« Reply #3 on: January 12, 2012, 09:17:02 PM »
did you consider taking a longer lease on the aircraft to get the fee down?

Offline Troxartas86

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Re: Qualification For a Loan
« Reply #4 on: January 12, 2012, 10:36:26 PM »
It's pretty hard if not impossible to get a new loan when you are still paying off your initial loan and don't own any of your own planes yet. Once you do own a plane, you can use it as a security (meaning that the bank can take the plane away if you dont pay them back) for a loan pretty close to that plane's sale value. I once saved my first airline from bankruptcy and kept it afloat and expanding for three more years by using just three new MD-80s to get around $150 million from the bank.

L1011fan

  • Former member
Re: Qualification For a Loan
« Reply #5 on: January 14, 2012, 02:42:25 AM »
It's pretty hard if not impossible to get a new loan when you are still paying off your initial loan and don't own any of your own planes yet. Once you do own a plane, you can use it as a security (meaning that the bank can take the plane away if you dont pay them back) for a loan pretty close to that plane's sale value. I once saved my first airline from bankruptcy and kept it afloat and expanding for three more years by using just three new MD-80s to get around $150 million from the bank.
ditto!!!!

 

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