What is Commercial Aviation Finance?
Commercial aviation finance is the specialist funding of aircraft and aviation businesses engaged in revenue-generating operations. It encompasses hire purchase, finance lease, operating lease, pre-delivery payment (PDP) finance, sale-and-leaseback, and working capital facilities for UK AOC holders, charter airlines, cargo operators, air ambulance trusts, offshore support aviation companies, approved training organisations and aircraft lessors.
Unlike private aircraft finance - which assesses the individual buyer's personal wealth and the aircraft's value - commercial aviation finance evaluates the entire business. Lenders want to understand your operator covenant, revenue contracts, AOC status, management team, maintenance programme and growth trajectory. The aircraft is the security, but the business is the credit.
Doulton Bridging Finance specialises in commercial aviation finance across the whole UK market. We access lenders not available to operators directly and present your case in the format that maximises your chance of the best possible terms.
Types of Commercial Aviation Finance
Hire Purchase (HP)
You acquire ownership of the aircraft from day one, with the lender holding a charge over it until the finance is repaid. Monthly payments cover principal and interest. At the end of the term, the charge is released and you own the aircraft outright. HP is on-balance-sheet finance.
Finance Lease
The lender buys the aircraft and leases it to you for an agreed term. Economically similar to HP - you bear the risks and rewards of ownership - but ownership stays with the lessor. At the end of the term you may have a secondary period or balloon refinancing option. On balance sheet under UK GAAP and IFRS 16.
Operating Lease
The aircraft is leased for a defined term with the lender/lessor bearing the residual value risk. Payments are typically treated as operating costs. Useful for operators who want flexibility to change aircraft types, or who want to keep capital deployment out of long-term fixed assets.
Pre-Delivery Payment Finance
Bridges the stage payments due to manufacturers before delivery of a new aircraft. The PDP loan is repaid or rolled into the delivery finance facility on completion. Available for ATR, Embraer, Pilatus and other OEM orders.
Sale and Leaseback
You sell an aircraft you own to a lessor and immediately take it back on lease. Releases the full capital value of the aircraft as cash, which can be used for fleet expansion, working capital or business investment. Common in commercial aviation for capital optimisation.
Refinancing
Replacing an existing aviation finance facility with a new one - either to achieve a better rate, release equity, extend the term, or change lender. Most effective when current facility rates are above market or when aircraft values have increased since the original finance was arranged.
Key Commercial Aviation Lenders in the UK
The UK commercial aviation finance market includes specialist aviation lenders, major clearing banks with aviation desks, and challenger asset finance houses. Each has different strengths, minimum tickets and appetite for different operator types. DBF has relationships across the full spectrum.
Specialist aviation lenders such as Investec offer the deepest understanding of aviation assets and structures, with highly competitive rates for the right operators. Major banks (HSBC, Lloyds, Barclays) offer relationship-based pricing for established operators. Challengers (Paragon, Shawbrook) provide accessibility for newer operators or non-standard structures.
AOC Requirements for Commercial Aviation Finance
A valid UK CAA Air Operator Certificate is a prerequisite for most commercial aviation finance products. Your AOC demonstrates that the UK CAA has assessed and approved your operation as fit to carry out commercial air transport. Lenders require sight of:
- Your AOC and associated operations specifications
- Maintenance organisation approval (UK CAA Part-CAMO and Part-145 or contracted)
- Safety management system documentation
- Flight operations manuals (OpsSpec, OM-A)
- Recent CAA audit reports and any enforcement correspondence
A clean audit history and current SMS documentation significantly support your finance application. We help you understand what lenders need and how to present your AOC documentation effectively.
How Doulton Bridging Finance Helps Commercial Operators
DBF provides a whole-of-market commercial aviation finance brokerage service. We begin with a detailed briefing on your operation, aircraft requirement, financial position and timeline. We then identify the most suitable lenders for your profile, prepare a detailed information memorandum, and approach lenders on your behalf - managing the process from first enquiry to drawdown.
Our fee is paid by the lender on completion. We do not charge upfront arrangement fees. We are authorised and regulated by the FCA (No. 814533) and act in your best interests throughout the process.