Cost

Private Jet Financing: Loan Terms, Leases, and Tax Rules

Loan terms, lease types, and the tax rules behind each

Most private jet financing runs through a secured term loan rather than a lease. According to U.S. Bank, buyers typically put down 15% to 20% of the purchase price, though some lenders may finance the full amount. After reading our ownership cost guide, people often ask how financing fits into the bigger picture. The loan payment is only one part of the total cost, alongside crew, hangar fees, and maintenance reserves.

An aircraft loan works much like a boat or vehicle loan secured by a titled asset. Repayment terms commonly range from three to 10 years, with either a fixed or floating interest rate. The lender holds a lien on the aircraft until the loan is fully repaid.

A lease works differently. Instead of borrowing money to buy the aircraft, you pay to use someone else’s asset for a set period and return it at the end, similar to leasing a car. Once the term ends, the depreciation risk is no longer yours.

Loan or Lease: What Actually Changes

The loan-versus-lease decision comes down to who wants the depreciation deduction and who wants to avoid resale risk. A loan makes you the owner from day one, so the depreciation deduction covered below is yours to claim, and any resale gain or loss at the end is yours too. A lease splits that differently depending on its type.

U.S. Bank describes two lease structures with opposite tax treatment. In a tax lease, the lessor keeps legal ownership and claims the depreciation, and that arrangement “generally offer[s] more favorable interest rates” because the lessor is pricing in a tax benefit it gets to keep. In a non-tax lease, the lessee is treated as the owner for tax purposes and “takes the depreciation hit” instead, trading a lower rate for a bigger tax position. U.S. Bank also flags a wrinkle worth knowing before you assume a lease avoids depreciation risk: some private aircraft are appreciating in the current market, which flips the usual math on who benefits from holding the asset at term end.

What a Loan Actually Costs You Upfront

A 15% to 20% down payment on even a light jet runs into six figures before financing starts, and the two variables that move the rest of the deal are the term length and whether the rate floats. A shorter term, three to five years, clears the loan faster and pays less total interest, but the monthly payment runs higher against the same aircraft. A longer term, out toward 10 years, spreads the payment thin enough to fit alongside fuel and crew costs, at the price of paying more interest over the life of the loan. A fixed rate locks that number for the term. A floating rate can fall with the market, and it can also rise, on an asset large enough that a couple of points of rate movement changes the monthly number by a meaningful amount.

Section 179 and Bonus Depreciation

The 2025 One Big Beautiful Bill Act (H.R. 1, Public Law 119-21) reset business-aircraft depreciation back to its most aggressive setting. Under IRS Publication 946, qualified property, business aircraft included, acquired and placed in service after January 19, 2025, qualifies for a 100% special depreciation allowance, meaning the full depreciable basis can be deducted in the year the aircraft enters service. Aircraft placed in service earlier in 2025, before that date, fall under the prior phase-down schedule instead, at 60% for aircraft and long-production-period property rather than the standard 40%.

Section 179 expensing runs alongside bonus depreciation as a separate tool. For 2026, the same IRS publication sets the maximum Section 179 deduction at $2,560,000, with the phase-out starting once total qualifying purchases for the year exceed $4,090,000. Both tools require the aircraft to clear the same bar. 26 U.S.C. §280F classifies an aircraft as listed property, which means you have to show more than 50% qualified business use for the year to claim either deduction. Investment use does not count toward that threshold. A jet flown mostly for personal trips, with the occasional business leg mixed in, will not clear that bar no matter how the loan is structured.

Loan, Tax Lease, or Non-Tax Lease

Who Should Not Finance a Jet

Financing does not make sense below roughly 200 flight hours a year, the point where our ownership cost breakdown shows fixed costs finally competing with charter and jet card pricing. Below that threshold, a loan payment plus insurance, hangar, and crew adds up to more than paying for hours as you fly them. The tax math can fail the same buyer too. A buyer who cannot document more than 50% qualified business use gets no deduction either way, since neither Section 179 nor bonus depreciation is available below that threshold. That gap removes a large part of the financial case for financing over a jet card or fractional share.

What Would Change This Math

The 100% bonus depreciation rate is not guaranteed to last. It replaced a phase-down that was already underway before the 2025 act reset it, so a future repeal or a renewed phase-down would change this calculation directly. A meaningful rise in secured-lending rates would also shift the loan-versus-lease comparison, since a tax lease’s rate advantage narrows or widens with the general rate environment it is priced against.

Frequently Asked Questions

What is the typical down payment for private jet financing?

U.S. Bank puts the typical range at 15% to 20% of the purchase price, though some lenders will finance the full amount depending on the buyer's credit and the aircraft's age. A newer aircraft with strong resale value generally clears a lender's approval at a lower down payment than an older one.

How long are private jet loan terms?

Repayment commonly runs three to 10 years, similar to marine or large vehicle financing, on either a fixed or a floating rate. A shorter term pays less total interest at a higher monthly cost; a longer term spreads the payment thinner at a higher total interest cost. Match the term to how long you plan to keep the aircraft.

Can you write off a private jet purchase in the year you buy it?

Yes, if the aircraft is placed in service after January 19, 2025 and clears the 50% qualified business-use test, the 100% special depreciation allowance under the One Big Beautiful Bill Act lets you deduct the full depreciable basis in that year. Aircraft placed in service earlier in 2025 fall under the prior 60% allowance for aircraft instead.

What is the difference between a tax lease and a non-tax lease?

In a tax lease, the leasing company keeps ownership and claims the depreciation, which usually earns you a lower rate. In a non-tax lease, you are treated as the owner for tax purposes and claim the depreciation yourself, at a higher rate that reflects the tax benefit you keep instead of the lessor.

Does leasing avoid the resale risk of owning a jet?

Usually, since you return the aircraft at the end of a lease term rather than selling it yourself. Check the current market before you count on that, though. U.S. Bank flags one exception: some private aircraft are appreciating rather than depreciating right now, which can flip who actually benefits from holding the asset at term end.

What happens if my business use falls under 50%?

Neither Section 179 expensing nor bonus depreciation is available once qualified business use drops to 50% or below, because 26 U.S.C. §280F treats an aircraft as listed property subject to that threshold, and investment use does not count toward it. The loan or lease itself still functions the same way; you simply lose the tax deduction that made financing more attractive than a jet cardA prepaid block of flight hours on a set aircraft category, bought at a fixed or capped hourly rate. No aircraft ownership is involved. or fractional share.

How fast do private jets depreciate?

New business jets typically depreciate fastest in their first five years, losing roughly 20% to 25% of delivery value before the annual decline slows significantly. That is a general industry pattern rather than a fixed rule for every model, and current supply constraints have pushed some valuations upward instead. Aviation International News reported in May 2026 that preowned jet values rose 3% even as transaction volume declined year over year. At the end of June 2026, aircraft tracker JETNET recorded preowned inventory at roughly 6.5% of the active fleet, below the 10-year average of 8.1%. As covered in our loan versus lease sections above, a loan leaves any resale gain or loss with the buyer, while a tax lease shifts residual value risk to the lessor.

Is aircraft financing interest tax deductible?

It can be, under the same ordinary-and-necessary business-expense standard IRS Topic 511 applies to other business travel costs, but the specifics depend on your business-use percentage and how the loan is structured. This is not tax advice. Confirm your specific deduction and depreciation election with a tax professional before you sign a financing agreement.

What companies offer private jet financing?

Aviation-specific lenders write most of this market rather than a general bank branch. PNC Aviation Finance underwrites both asset-based and credit-based aircraft loans alongside leasing options, and Global Jet Capital specializes in business-aircraft leasing and structured financing for buyers who want an alternative to a straight bank loan. Get quotes from at least two lenders, since terms on an asset this large vary more between lenders than a typical vehicle loan does.

Is there a private jet financing calculator?

Not a single standardized one, since a real quote depends on your credit, the aircraft's age, and where rates sit that week. Run the same rough math a mortgage calculator uses instead: down payment (15% to 20% of purchase price) subtracted from the price, financed over your chosen term at the rate a lender quotes you, fixed or floating. Most aviation lenders, including PNC and Global Jet Capital above, will run that calculation for a specific aircraft as part of a prequalification conversation.

We update this guide as aircraft, program, and route pricing changes. Spotted something out of date? Tell us and we'll check it.