Financing an N-reg for an alien outside USA

[PapaPapa]

Hello everyone,

since it's my first post here, i'll make it longer and put a quick background here before the trick question... There's also a bit of info on my profile.

So I'm french, JAA PPL current, not NVFR rated yet but coming up, with about 160h of flight overall. I currently live in Luxembourg - ELLX (Google maps / Jeppview / Flitestar /other is your friend if you don't know where this tiny country is ;-) )

 

Given the weather here, and also because of a friend of mine, I'm thinking IFR. One of the options I have is to gett an FAA converted PPL to then go the FAA IFR route.

That also means flying an N-reg airplane in europe, which in turns means buying one because you can't find that easily around here for rent. (Buying is possible through a trustee)

 

Now the trick question... I was told it is virtually impossible to finance an N-reg airplane outside the USA. From the european side the obvious is that the lender can't get a hold of the airplane in case of default because the actua owner is the trustee. Ftom the US side, well for one thing "credit rating" is a  non-notion here (except in UK)... Then there's the risk for me that i know nothing of the customs of loaning in the USA, and also the currency risk as every month the forex rates change and it's not helpful to keep a budget running :-)

 

Soooo.... if someone hask nowledge about his kind of "issue" i'd be happy to hear it !

Obviously, if what i was told is confirmed thent at least i will know for sure my only IFR option is the JAA route...

 

Thanks for reading ! ;-)

 

Pierre

[Magnum]

Hello Pierre,

it is possible to finance a N-registered AC in Europe, IMHO several banks in Germany do that. You should ask a company that has experience with that. Aircraft guarantee (www.agcorp.com) is not the cheapest, but has a very good reputation.

It is a good idea to get an independent US-PPL or CPL instead of a conversion that is dependent on your European license. If you loose your European license, your European medical or even only your license number changes, the FAA PPL and your IR won't be valid anymore. You will have to do the IR again! Several pilots had that problem when they got the new JAR license. You'll have to fly approx 10 hrs with an instructor and pass the written and pratical test to get a US-PPL if you already have the JAR PPL (shouldn't be a big deal while training for the IR). Or invest a bit more time and get the CPL. 

BTW: I live in Saarbruecken and fly out of Zweibruecken. There is a N-Reg Piper Warrior available to rent, but I wouldn't use it for IFR.

Do you know the actual fuel prices in Luxembourg?

[N9453V]

Hi Pierre,

I actually went through a similar situation when purchasing my aircraft, a 1970 M20G. I'm a Canadian citizen, but I live and work in California. 

An N-numbered aircraft must be registered to a U.S. entity, be that an individual, corporation or trust. The only exception is a Non Citizen Corporation can register the aircraft provided that at least 60% of the annual flight hours will be within the U.S. (this is the route I took).

In your case, the only option would be a Trust, where a bank here in the U.S. would be the legal owner of the aircraft and you would be the beneficiary. You would need to hire a lawyer to draft the trust agreement and in most cases you would pay a monthly or annual fee for the services of the trustee.

The FAA had temporarily suspended processing foreign owner trust applications, but it appears they have resumed them (http://www.ainonline.com/news/single-news-page/article/faa-no-ban-on-registrations-of-foreign-owner-trust-aircraft-25223/).

In terms of financing, I think that will be the hardest. I was very fortunate not to have to finance the purchase of my airplane since I was unable to find any lender that would lend to a Non-U.S. Citizen despite having a good credit score in the U.S. and no Canadian lender was willing to finance the purchase since it would be stored and registered outside Canada. I have no experience with Aircraft Guarantee, but it sounds like it could be an option worth exploring, although it's unclear on their site if they just act as a trustee or will provide financing as well.

I converted my FAA PPL to a Canadian one painlessly (20 question written exam), but haven't converted my FAA IFR to a Canadian one yet although it's a similar exam. I know a lot of people who trained here and converted to JAR easily... so if you wanted to convert your JAR PPL to a US one, you could come here do your IFR easily.

Let me know how it works out for you. I'd recommend getting the following book - it covers Non-U.S. Citizen aircraft ownership in greater detail: http://www.amazon.com/Aircraft-Ownership-Legal-Tax-Guide/dp/0071407642

-Andrew

[PapaPapa]

Thanks for yout Replies !

 

@Andrew : your situation looks simpler than mine regarding registration, being a US resident :-)

Thanks for the references regarding the foreign trust applications and the book about ownership. I'll dig into that further if I first solve the financing issue and finally decide to go the FAA IR route.

 

@Magnum : i do know the price (which xas 1,93EUR/l last time i went there) and also the handling fee (90 EUR) which i don't know if you can dodge when only refueling...

Thanks for the side notes about a converted PPL, interesting to know. I'll keep that in mind.

Saarbrucken and Zweibrucken being not so far, is there any chance we could meet up and have a chat ?

I do like the mooneys on paper very much, but have yet to climb in one... 0:-)

[Magnum]

We can meet in Saarlouis or Trier and fly with my 205. Just send me a mail to shedule a meeting.