Most bank lending policy is built around loan-to-value — which means the “value” side of that equation has to be accurate, not assumed. Having worked with dozens of lenders and banks across the country on aircraft-secured loans, I’ve seen how often a deal that looks clean on paper turns out to have issues that only surface with a proper field inspection — and by then, the loan may already be structured around a number that doesn’t hold up.
Why Desktop Valuations Create Risk for Lenders
A desktop valuation is built from data supplied by a third party — frequently the seller or a broker with a direct interest in the loan closing at a certain amount. It involves no physical inspection of the aircraft and no independent verification of the logbooks. For a bank underwriting a loan against that aircraft as collateral, that’s a real exposure: unreported damage history, incomplete maintenance records, or unresolved liens can all significantly change what the aircraft is actually worth — and none of that shows up in a report built entirely from someone else’s paperwork.
What a Field-Verified Appraisal Adds to Your Underwriting File
Verified Collateral Value. An in-person appraisal confirms that the aircraft physically matches what’s represented in the loan file — not just what a data sheet claims.
Title and Lien Awareness. Part of a thorough appraisal process involves flagging title and lien issues that need to be resolved before closing, rather than discovered afterward.
A Defensible File for Examiners. Every Plane Data appraisal report states its Scope of Work clearly and is prepared to meet USPAP reporting standards. If your loan file is ever reviewed by an examiner or auditor, having a field-verified, credentialed appraisal on record — rather than a desktop estimate — is a materially stronger position.
Ongoing Risk Monitoring. Aircraft values and condition change over the life of a loan. Periodic reappraisals and risk analyses can confirm the aircraft is being properly maintained and that your residual value expectations still reflect reality, rather than assuming nothing has changed since origination.
What to Require Before You Fund
Consider building these into your aircraft lending checklist:
- A signed appraisal report from a certified appraiser (PAAO certification is the recognized standard specific to aircraft)
- Confirmation the report is based on an in-person field inspection, not a desktop estimate
- A clearly stated Scope of Work in the report
- Title search confirmation and lien resolution prior to closing
- A plan for periodic reappraisal on higher-value or longer-term loans
Working With Plane Data, Inc.
If you are building or updating an aircraft lending policy, our free guide 3 Things Every Banker Should Know About Aircraft Financing walks through the collateral issues that most often derail an aircraft loan, and what to ask for before you fund.
Since 1992, our reports have supported hundreds of aircraft financing transactions, giving lenders a verified, defensible basis for loan-to-value decisions. If your bank is financing an aircraft and wants a collateral valuation you can stand behind, learn more about how we work with lenders or request a quote for your specific transaction.