Your purchase price is not the number your lender will use for LTV.
Credit officers need an independent USPAP opinion of value they can defend in the file. The contract price is what the buyer and seller agreed to pay. It is not, by itself, what the aircraft is worth as collateral.
In the fourth quarter this shows up more often. Appraised value sometimes comes in below purchase price. When lenders underwrite to the lower of purchase price or appraised value, that gap can leave you short on equity if you did not plan for it.
Financing appraisals at a glance
- A USPAP opinion of value for the credit file, not a price-guide pull.
- Desktop or on-site, matching lender policy.
- LTV often uses the lower of purchase price or appraised value (common industry practice; not a credit decision by RAD Jets).
- Q4 closings need the appraisal on the calendar early. See year-end aircraft appraisal closing for scheduling context.
- Other uses (pre-purchase, estate, insurance, divorce, and more) are listed on our appraisals page, along with lease rate opinion letters (a separate, non-USPAP product).
Why lenders require an aircraft appraisal
Lenders lend against collateral. A USPAP-compliant appraisal gives the credit file a professional valuation separate from the negotiation. That number supports loan-to-value, structure, and risk assessment.
For business jets and turboprops (Gulfstream, Bombardier, Cessna Citation, Beechcraft King Air, and similar platforms), value turns on configuration, times, maintenance status, programs, and market conditions. A lender-ready appraisal addresses those factors under Uniform Standards of Professional Appraisal Practice (USPAP). A pricing-guide pull is a market reference. It is not a substitute for a formal opinion of value on a specific aircraft and intended use.
Who typically orders varies by institution and deal. Sometimes the lender orders. Sometimes the borrower must deliver a lender-acceptable report. Either way, the useful outcome is the same: a USPAP opinion of value the credit file can use.
How appraisal feeds LTV (and why Q4 surprises happen)
Loan-to-value compares the loan amount to the aircraft's value. How that "value" is defined is a lender decision. Industry practice among aviation finance shops commonly ties LTV to the appraisal, often using the lower of purchase price or appraised value.
This is an educational overview of common lender practices, not legal, credit, or tax advice. Final appraisal scope and use are defined in the engagement and in the lender's requirements.
Lower of purchase price vs appraised value
Many lenders underwrite to the lower of the contract purchase price or the appraised value. If the appraisal supports the price, LTV math usually tracks the deal as structured. If the appraisal comes in below the contract price, the value side of LTV may be the lower number, which can change equity required or loan size. Confirm the specific lender's policy early. RAD Jets provides the USPAP opinion of value, not the credit decision.
When value comes in below contract price
Financing may not support the full price at the target LTV. Common paths in market practice include increasing the down payment, renegotiating price, or discussing structure with the lender. None of those paths is automatic, and none is advice from the appraiser. They are conversations between borrower and lender.
Year-end closings stack appraisal with pre-buy, title, insurance, and funding. Ordering the appraisal early enough to inform the file reduces late-stage surprises. For year-end closing timing, see year-end aircraft appraisal closing.
What credit files look for: USPAP and ASA
Credit officers and aviation lenders typically look for two things: methodology that follows USPAP, and credentials that signal competence and independence in aviation valuation.
USPAP sets standards for how appraisals are developed and reported, including ethics, scope, and support for conclusions. An ASA Accredited Senior Appraiser designation from the American Society of Appraisers indicates the appraiser met that organization's education, experience, and examination requirements. For collateral files, that combination is usually more useful than an informal market "feel" or a digest extract alone.
Pricing guides vs a USPAP appraisal
Pricing digests can be useful references. They are not the same as a USPAP-compliant appraisal prepared for a specific aircraft and intended use. Lenders who require a formal appraisal are usually asking for an independent opinion of value under USPAP, with defined scope, assumptions, and a signed report. If your credit policy distinguishes "guide" from "appraisal," say so early so the engagement matches the file.
One related distinction: an appraisal is not a pre-buy inspection. Pre-buy examines condition and airworthiness risk. Appraisal develops an opinion of value.
Desktop vs physical appraisal for financing
Lenders commonly accept either a desktop appraisal or a physical (on-site) appraisal, depending on loan size, aircraft type, file risk, and internal policy.
- Desktop: Records- and market-based, remote. The appraiser analyzes documentation and market data without inspecting the aircraft in person. Useful when the lender's policy allows it and records are complete.
- Physical / on-site: Includes inspection of the aircraft as part of the engagement, plus records and market analysis. Often specified when policy, risk, or aircraft characteristics call for it.
Confirm the lender's requirement before scoping the job. Delivering desktop when the file requires physical (or the reverse) slows closing. RAD Jets offers both desktop and on-site scopes for lender work. Turnaround is very fast once scope and records are set.
Records lenders often need for a desktop appraisal (confirm the exact package for your engagement):
- Recent computerized maintenance status report
- Make, model, and serial number
- Configuration
- Aircraft specification with airframe / engine / APU times
- Maintenance program enrollment
- Damage history
Process detail also lives on the aircraft appraisals page.
Working with RAD Jets on finance deals
RAD Jets focuses on business jets and turboprops, including platforms such as Gulfstream, Bombardier, Cessna Citation, and Beechcraft King Air, and related types as the engagement requires. Appraisals follow USPAP. This page stays on the lender and financing job.
Chris Canon, MBA, ASA owns and operates RAD Jets. He is an Accredited Senior Appraiser with the American Society of Appraisers, with over 15 years of industry experience including more than 12 with Textron Aviation across airframe, avionics, and full aircraft operations. Based in Atlanta, Georgia, RAD Jets works with credit officers, aviation finance partners, and borrowers who need a lender-acceptable report.
Finance partners who have worked with Chris describe expertise and responsiveness:
Prestige Aircraft Finance (President and Founder) has noted Chris's expertise and fast turnaround in support of financing work.
Sam Stone, SOL Jets, has noted a desktop appraisal completed quickly.
Happy to coordinate with your credit officer or aviation finance partner so scope, records, and intended use match the file.
FAQs for lender aircraft appraisals
Why do lenders require an aircraft appraisal?
Lenders lend against collateral. A USPAP-compliant appraisal gives the credit file an independent opinion of value separate from the purchase contract. That number supports loan-to-value, structure, and risk review for business jets and turboprops. Confirm your institution's appraisal policy early in the deal.
Is purchase price the same as appraised value?
No. Many aviation lenders underwrite to the lower of contract purchase price or appraised value. If the appraisal comes in below the contract price, equity or loan size may change. RAD Jets provides the USPAP opinion of value, not the credit decision. Ask your lender how it defines value for LTV.
Do I need a desktop or a physical appraisal for financing?
Either can be accepted depending on loan size, aircraft type, and lender policy. Desktop is records- and market-based. Physical includes an on-site inspection. Confirm the requirement before the engagement so you do not order the wrong product twice. RAD Jets offers both scopes.
What credentials do credit files look for?
Credit officers typically look for USPAP methodology and an ASA Accredited Senior Appraiser designation that signals competence and independence. A pricing-guide extract is a market reference. It is not a substitute for a formal opinion of value on a specific aircraft and intended use.
What records help a lender desktop appraisal?
Typical inputs include a recent maintenance status report, make/model/serial, configuration, airframe and engine times, maintenance program enrollment, and damage history if any. Exact packages vary by engagement. Incomplete records slow the file even when turnaround is very fast.
How does year-end timing affect a finance appraisal?
Q4 closings stack appraisal with pre-buy, title, insurance, and funding. Order the valuation early so it is not the item that slips past December 31. See our year-end aircraft appraisal closing page for scheduling context. Turnaround is very fast once scope and records are set.
How do I start a lender-ready appraisal with RAD Jets?
Share aircraft make and model, serial if available, whether the lender specified desktop or physical, your target closing window, and your role (lender, borrower, or broker). Start with a free preliminary call. Email chris@radjets.com or call 770-316-1631.
Request a lender-ready appraisal
Start with a free preliminary call. Share aircraft make and model, serial number if available, whether the lender specified desktop or physical, your target closing window, and your role (lender, borrower, or broker).
Email chris@radjets.com or call 770-316-1631. More at radjets.com.
Disclaimer
This page is an educational overview of common aircraft-financing and appraisal practices. It is not legal, credit, tax, or lending advice. Appraisal scope, assumptions, and intended use are defined in the written engagement. Loan approval, LTV, and structure are determined solely by the lender.