Aircraft finance in Australia: how to fund a used plane or helicopter and what to check first

How does aircraft finance work in Australia?

Buying a light aircraft or helicopter on finance looks a lot like buying any other big asset, with a few aviation-specific twists. A lender advances the purchase price, the aircraft (and sometimes other assets) is the security, and you repay over an agreed term, often with a balloon at the end to keep repayments manageable.

The twists are what make it a specialist field. Aircraft are identified by serial numbers, not just a registration. The airframe and the engines are separate items. Maintenance records can swing the value by a lot. And the pool of lenders who will take an aircraft as security is small, so the quality of your file counts for more than it would on, say, a ute.

We’ll be upfront: aircraft lending isn’t something Ownright arranges every day. What we do well is look at your whole position, work out the structure that fits, and open options a single-product lender won’t, including loans secured against other assets. Our aircraft finance page sets out where we fit.

Which loan structures do buyers use?

Structure	How it works	Often suits
Chattel mortgage	You own the aircraft from day one; the lender takes a registered security interest	Business-use aircraft such as training, charter or ag work
Secured asset loan	Fixed term, the aircraft as security, often with a residual or balloon	Private owners and owner-operators
Loan secured by property	Equity in a home or commercial property backs the purchase	Buyers whose aircraft is thinly financeable on its own
Second mortgage	A loan behind an existing first mortgage, then refinanced or repaid	Short-term or part-deposit needs with a clear exit

A chattel mortgage is explained in our chattel mortgage guide, and the effect of a residual is covered in balloon payment loans explained. How GST and depreciation apply to a business-use aircraft is a job for your accountant, and the ATO’s pages on business assets are the place to start.

If the deal depends on the property’s equity, our guide to types of loan security shows how lenders think about it.

What will a lender want to see?

Expect questions in five areas.

1. The aircraft. Type, age, airframe hours, engine hours and time to overhaul, avionics and the maintenance history. Common types with complete records are easier than unusual ones with gaps.
2. The use. Recreational, training, charter and agricultural flying are assessed differently. If the aircraft earns money, show how.
3. The deposit. Lenders in this space commonly want real cash in, because values can fall and resale can take time.
4. Your capacity. Repayments plus hangarage, insurance, scheduled maintenance, fuel and an engine overhaul reserve. Owners often underestimate these.
5. The paperwork. A valuation, a pre-purchase inspection, the logbooks and proof the seller can pass clean title.

The last one is where private purchases go wrong, so it’s worth slowing down there.

Why isn’t the CASA register enough to prove ownership?

It’s natural to assume the Civil Aircraft Register tells you who owns an aircraft. It doesn’t, at least not conclusively. CASA’s own register material says registration details don’t establish a legal or beneficial interest in the aircraft, and the regulations say register entries aren’t conclusive evidence of title. The register also doesn’t record mortgages or other finance.

In practice, CASA’s registration information tells you who is on the register and who operates the aircraft. It doesn’t tell you whether a bank or finance company has a security interest in it. For that you need the PPSR.

How do you run a PPSR check on an aircraft?

The Personal Property Securities Register has a dedicated aircraft search. The official guidance at ppsr.gov.au says it covers aeroplanes, rotorcraft such as helicopters, gliders, balloons, motor-gliders and airships, and that you search by serial number. A few points worth knowing before you click:

• Search the airframe and every engine. Airframes and engines are identified separately, so a security interest can be registered against one and not the other. A twin has three serial numbers to check.
• Get the identifier right. The PPSR warns that a wrong number can return information about a different aircraft, and you’re still charged for the search. For small aircraft, the search also asks for the nationality and registration mark, which for Australian aircraft starts with VH.
• Search close to payment. The PPSR advises searching on the day you intend to buy.
• Know what the result shows. It tells you whether security interests are registered against that serial number. It doesn’t give you the make, model or registration status.
• Add a seller search. An aircraft serial-number search won’t show interests registered against the seller personally or against their company. Ask your broker or solicitor whether a grantor search makes sense for the deal.

If a registered interest turns up, don’t panic. It may be a finance company the seller intends to pay out at settlement. What matters is that the payout is arranged and the interest is discharged as part of the transaction, not left as a promise.

What else can sit behind an aircraft?

Beyond the PPSR, two things catch buyers out.

Unpaid airport and air navigation charges. The Air Services Act 1995 includes a statutory lien for unpaid service charges, with powers around seizure and sale. How a lien ranks against other interests is a legal question, so if the aircraft has been flown commercially or has an uncertain charges history, ask your solicitor to check the position before you pay. The Act is on the Federal Register of Legislation.

Records that don’t match the metal. Logbooks with gaps, missing airworthiness directive compliance or engine hours that don’t reconcile can cut the value and make a lender walk away. An independent inspection by a licensed maintenance engineer, before you commit, is cheap insurance.

A worked example (illustrative only)

Say a charter operator wants a used four-seat helicopter from a private seller and has a small deposit saved. A lender asks for a valuation, a pre-purchase inspection and the logbooks. The buyer’s solicitor runs PPSR searches on the airframe and the engine on the morning of settlement and finds one registered interest, held by the seller’s finance company. The contract is amended so the payout is made from the sale proceeds and the discharge is confirmed. Because the deposit is thin, part of it is covered by equity in the operator’s own commercial property.

Nothing here is unusual. It works because the checks happened before the money moved and the structure matched how the aircraft earns.

What should you budget for beyond the repayments?

Lenders look at this because it decides whether the loan survives year two. Before you sign, price out each of these for the specific aircraft, not a generic figure:

• Hangarage or tie-down at your home airfield
• Insurance, which depends on the pilots named, the use and the aircraft’s value
• Scheduled inspections and the maintenance the logbooks say is coming due
• An engine and component overhaul reserve, set aside monthly rather than faced as one bill
• Fuel, avionics updates, registration and any charges at the airports you use

If a big overhaul is due soon after purchase, tell the lender and your broker up front. It can change the value, the deposit and the structure, and finding out mid-application is worse than saying so at the start.

Is there a better option than an aircraft loan?

Sometimes. If the aircraft is hard for a lender to value, or the deposit is short, a facility secured by property can be simpler to arrange. The trade-off is that your property is on the line, so it needs to be a considered choice. A business owner who also needs working capital might find a broader facility fits better than a single-asset loan. If you’re weighing these up, our private sale asset finance page and used equipment finance page show how we approach second-hand assets bought outside a dealer.

Want a hand working out which structure fits your aircraft? You can check your options with us before you commit to a purchase contract.

Sounds like you’re buying an aircraft and want the finance sorted

If you’ve found the right plane or helicopter, we’re the lending experts in making hard-to-place asset deals work, whether that’s a secured asset loan, a chattel mortgage or finance backed by other property. Click the button below and see where you stand.

Enquiring takes about 60 seconds and there’s no credit check when you first enquire, so your credit file isn’t touched just for asking. We don’t send your details to a pile of lenders. A real person looks at your situation and calls you. Please fill the form in accurately so we can match the right option first time.

See if you qualify →