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  #1  
Old 09-28-2022, 05:01 PM
MaysRV10 MaysRV10 is offline
 
Join Date: Jan 2021
Location: Algonquin
Posts: 9
Default Build Financing

Builders

When I started my kit 16 months ago I had factored in using NAFCO for financing the heavy price items of the build when I’d get to them; avionics, engine, paint, interior, and components. At the time NAFCO offered financing if you purchased the kit; empennage, fuselage, and wings. They also offered to finance components piece mail as you came to them in the build process. Ensuring you didn’t have a brand new Garmin system sitting on the shelf for three years.

I’ve reached that point in my build where I was ready to start ordering the bigger items. I reached out to NAFCO to start the loan process and they informed me they only finance completed projects now�� Has anyone else financed with NAFCO before they closed their kit financing down, if so how recent?

I spoke with AOPA finance as well, they loan only for completed kits.

Just wondering if other builders have used a different financial institution that offers loans on uncompleted kits?

Thanks
Andy

Last edited by MaysRV10 : 09-28-2022 at 06:39 PM.
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  #2  
Old 09-28-2022, 07:01 PM
lmerrill lmerrill is offline
 
Join Date: Jul 2020
Location: Marion, KY
Posts: 25
Default

I have found that no one wants to finance kits anymore. I ended up having to get a home equity line of credit to use to complete my build. Once it is finished I plan on refinancing. Not what you want to hear Iím sure but I also hope someone responds with better news because I am open to other options as well
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  #3  
Old 09-28-2022, 07:07 PM
agent4573 agent4573 is offline
 
Join Date: Aug 2019
Location: Mountain view
Posts: 614
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We used Lightstream last year for our construction loan.
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  #4  
Old 09-28-2022, 07:11 PM
KeithO KeithO is offline
 
Join Date: Jul 2010
Location: Jackson,MI
Posts: 109
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Do you have a 401K with a good balance ? Usually it is possible to take a loan against that balance with usually unbeatable interest rates.
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  #5  
Old 09-29-2022, 04:05 PM
spatsch spatsch is offline
 
Join Date: Nov 2014
Location: Denison, TX
Posts: 382
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Another thing you might consider is that you can delay a lot of the things you listed until after you are flying and financing is available. In particular from you list: avionics, engine, paint, interior you can skip paint and interior completely and get minimal avionics to get going. You will need an engine ... .

Oliver
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  #6  
Old 09-29-2022, 04:13 PM
nohoflyer nohoflyer is offline
 
Join Date: Sep 2018
Location: Brooklyn, NY
Posts: 357
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Quote:
Originally Posted by KeithO View Post
Do you have a 401K with a good balance ? Usually it is possible to take a loan against that balance with usually unbeatable interest rates.
Just realize that you’ll be missing out on interest on the amount you withdraw. Good news is the interest on the loan is payed back directly to your account. At least at my company’s plan. I took out a 401k loan to pay off debt years ago.
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  #7  
Old 09-29-2022, 04:53 PM
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Auburntsts Auburntsts is offline
 
Join Date: Jan 2005
Location: Tampa, FL
Posts: 3,200
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I’ve also been looking into this. Personal loans from SoFi, Lightstream or similar lenders cap out at $100k which for an RV-10 construction loan can be significantly short of the mark. Home equity and 401k loans work if you have the equity/balance to pull from. This is all great IF you only need to finance one major item, like the engine or the panel. The problem is with seemingly all of lenders bailing from Kit construction loans, there’s simply few instruments available to finance the major portions of high end kits altogether. These days taken together all these necessary components brand new can easily run between $200K-$300K from start to finish. I’m still looking and would be very interested in what other people discover. Right now my Credit Union (Navy Federal) might come to the rescue but it’s not a done deal yet.
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  #8  
Old 09-29-2022, 05:52 PM
alpinelakespilot2000 alpinelakespilot2000 is offline
 
Join Date: Jan 2005
Posts: 3,774
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Quote:
Originally Posted by KeithO View Post
Do you have a 401K with a good balance ? Usually it is possible to take a loan against that balance with usually unbeatable interest rates.
Quote:
Originally Posted by nohoflyer View Post
Just realize that you’ll be missing out on interest on the amount you withdraw. Good news is the interest on the loan is payed back directly to your account. At least at my company’s plan. I took out a 401k loan to pay off debt years ago.
Pulling money out of a 401k likely at or close to the bottom of a bear market then paying it back at increasingly higher market prices later, effectively selling low, buying high(er), probably not the ideal strategy these days. Not sure a loan, even if available, is much better but I’d lean that way if possible assuming a decent interest rate.
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Last edited by alpinelakespilot2000 : 09-29-2022 at 05:55 PM.
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