What's new
Van's Air Force

Don't miss anything! Register now for full access to the definitive RV support community.

Financing Options Available - RV10

Shays

Active Member
Hi Guys,

I am new to VAF so hello everyone!

I am in the process of a pre purchase phase for a builder assisted build of a RV10 here in Colorado. I am considering getting a 50% loan for my build which will end up on the higher side of the spectrum of a finished RV10. I will be paying for a large portion for builder assisted fee(rightfully so), and I was not sure how the finacial institutions handle the fact that some owners build themselves and some use builder assist and raising the cost of the finished product as there is a difference of cost between the two. Any tips/advice on how I should approach it?

Additionally, I would like to know from those of you who have used financing, if you have any recommendations for banks/companies that are worth a conversation.

Thank you,

Nir
 
Nir, give NAFCO a call. They were really helpful with me during the build process 7 years ago. I've since done a couple more aircraft loans with them. I highly recommend them.
 
If you anticipate using the airplane as collateral, any bank that’s on the ball will ask for FAA documentation/approval of the assist program; e.g., that the amateurs will do 51% or more of the work.
Other than that, the bank will mostly care about the market value of the airplane (their collateral). IMHO a builder assist plane is worth no more than a well built by amateurs plane.
 
Last edited:
Contact Robert Guderian at First Pryority Bank. I'm not sure about the builder assist, but they basically want 20% equity in the project of your projected cost. Super easy to work with and no appraisals so no finding an exact "like" airplane project.
 
Contact Robert Guderian at First Pryority Bank. I'm not sure about the builder assist, but they basically want 20% equity in the project of your projected cost. Super easy to work with and no appraisals so no finding an exact "like" airplane project.

+1

We worked with Robert @ First Pryority to purchase our flying RV-10. The process was painless.
 
Strange that First Pryority states on their website that they do not loan on home-built and light-sport airplanes.... Whats up with that?
 
Strange that First Pryority states on their website that they do not loan on home-built and light-sport airplanes.... Whats up with that?

I saw that a few months ago too. I got my initial loan about ten years ago and paid it off awhile ago. It worked like a construction loan on a house. You got approved for a total amount, but you only spent what you needed on each kit.

They are a very small bank. Their processes are very manual. It's just Robert and a couple associates working aircraft loans. I would give Robert a call to get the current facts. They were very easy to work with.
 
I saw that a few months ago too. I got my initial loan about ten years ago and paid it off awhile ago. It worked like a construction loan on a house. You got approved for a total amount, but you only spent what you needed on each kit.

They are a very small bank. Their processes are very manual. It's just Robert and a couple associates working aircraft loans. I would give Robert a call to get the current facts. They were very easy to work with.

Awesome to have those options out there. I am all about minimal red tape.

Eventually I will need to talk to Robert!
 
Contact Robert Guderian at First Pryority Bank. I'm not sure about the builder assist, but they basically want 20% equity in the project of your projected cost. Super easy to work with and no appraisals so no finding an exact "like" airplane project.

What does that mean? That they want you to have 20% or they want 20%?
 
I talked to Bob this morning and with his approval I am posting the terms here, they are subject to change with time and by person. I hope this could be helpful for others as well.

Regarding the builder assist fee, it's not considered at all and should be calculated out of the loan.

We will loan on many different types (but not all) of aircraft kits (homebuilt and experimental). Please check with us to determine if the kit you are considering is one we will finance. All our loans are fixed rate and have no prepayment penalties. Things we need to look at a proposal are: completed credit application (attached and also available at our aviation web site: www.1st-of-pryor.com ), copies of the first two pages (first page and signature page) of your last two years federal 1040 tax form together with any business schedules (C,E,F, K-1, etc.); an estimate of the total cost of the aircraft together with the amount you wish to borrow, and a copy of your driver?s license and pilot?s license. If you will be sending sensitive personal information via e-mail, we request that you contact us prior to sending for a secure mail link. Although we prefer to get involved in the financing from the start, it is possible to start financing ?mid-stream?. If we are not involved at the start, we will require copies of invoices which you have already paid, photos of the aircraft in its current state of construction and you may incur additional approval time and loan costs. Normal closing costs average $750-$760 on a build. Interest rate during the construction phase is at 8.25%. The kit construction loan is set up for an 18 month term to allow completion of the project. A one year extension is possible if the construction is not finished but significant progress has been made. Quarterly photos of the project are required. We will loan 80% of the cost of parts (including freight). We will not loan for tools, labor or builder?s assist. If the kit has already been started, we can utilize the money that you have already spent (verified by invoices) toward your 20% equity in the project. We do a controlled disbursement where the funds we disburse are sent directly to the supplier, with a copy of the check sent to you. You will be required to carry ground only coverage on the aircraft kit during the construction phase. Some insurance companies allow you to bump up the coverage during the construction process, and that is acceptable to us. Loan advances, however, may not exceed the amount of insurance in force. During the construction phase, you will be required to pay interest on a monthly basis on the amount of funds advanced. We encourage you to include extra funds in the construction loan to take care of price increases, unanticipated costs or additional items purchased. There is no additional cost to you if these funds are not used, since you are only paying interest on the funds advanced. If there are not enough funds in the loan to complete the aircraft and the loan needs to be rewritten to allow additional funds to be advanced, then you would incur an additional $750.00 in closing cost. When the kit is complete and the aircraft has been certified as airworthy, the loan is converted (modified) into an amortizing loan. Generally speaking, there is no charge involved for this modification. The interest rate at conversion will depend upon our current rates at the time of completion. Currently there are five different interest rate options that are available upon completion. Those options currently are:

7.25% on a 15 year straight amortization

7.00% on a 10 year straight amortization

6.25% on a 5 year straight amortization

6.75% for the first 5 years on a balloon on a 15 year amortization

6.50% for the first 5 years on a balloon on a 10 year amortization
 
I talked to Bob this morning...The kit construction loan is set up for an 18 month term to allow completion of the project. A one year extension is possible if the construction is not finished but significant progress has been made.


Lol... I wish I could have completed in 18 month. Heck, even 36!
 
It seems like 30 months is the max with a 1 year extension, but yes I agree it's not realistic for most people building. Another idea is to start in cash and start the loan when you need it mid build to buy more time.
 
Yes, 80% LTV. You have to at least have 20% already invested in the project otherwise they only fund 80% of each request until the project has 80% LTV.

I did cash up until the finish kit and then am kicking it in high gear. I wouldn't say it's a great solution for starting with a tail kit unless doing a quick build and having a lot of dedication and time!
 
Home equity loan is the way to go if you qualify. Lower interest rates and tax deductible.
 
Back
Top