Commercial Aircraft Financing vs. Purchasing

Deciding whether to lease or purchase aircraft is one of the biggest financial choices aviation businesses face. While financing offers flexibility and preserves cash flow, purchasing strengthens ownership and long-term stability. At LDC Standard Capital, we help aviation businesses weigh the pros and cons to choose the path that fits best.

Financing (Leasing)

Leasing allows airlines—especially newer or budget carriers—to keep more working capital on hand. With leases, maintenance costs are typically lower because newer aircraft are less likely to face breakdowns. However, leasing comes with limitations: it is reported on the balance sheet, and airlines usually cannot claim tax depreciation benefits. Still, over one-third of the world’s commercial planes today are leased because of the flexibility they provide.

Purchasing

Buying aircraft requires significant upfront investment, which can strain cash reserves and balance sheets. On the positive side, ownership builds collateral, reduces long-term interest costs, and allows businesses to use sale-and-leaseback models. In these arrangements, airlines buy aircraft directly from manufacturers at better rates, sell them to leasing firms, and then rent them back. This approach helps airlines access liquidity while still operating their fleet.

Industry Outlook

The aviation sector continues to grow steadily as demand for both passenger and cargo services rises worldwide. Shifts in consumer preferences—especially younger generations favoring experiences and travel over material goods—have boosted global flight demand. Despite challenges like rising fuel costs and international taxes, the aircraft industry remains a strong market for investment and growth.

Commercial Aircraft Financing Options

Finding the right financing partner can be difficult, as aviation requires large amounts of capital. Depending on your needs, several funding solutions are available:

• Small Business Loans: Offered by banks, credit unions, or the SBA with lower rates, but stricter requirements.
• Line of Credit: Provides revolving access to cash, only charging interest on what you use—ideal for flexible expenses.
• Merchant Cash Advance: Fast access to funds based on future receivables; helpful for businesses with high debt loads or urgent cash needs.
• Asset-Based Financing: Uses equipment, inventory, or other assets as collateral to secure funding.

Consulting Support

At LDC Standard Capital, we go beyond financing—we offer strategic aviation consulting. Whether you’re deciding between leasing or purchasing, expanding airport operations, upgrading equipment, or hiring staff, our team will guide you to the right solution. Every business has unique challenges, and we build financing plans tailored to your growth.