Aviation Company Funding
We are living in a technically advanced society like none that has ever existed before. We can now complete a task in a fraction of the time that it used to take; such as ordering food via an app on our phones or making a doctor’s appointment comfortably in the same fashion. The presence of technology is being felt everywhere and is continuing to improve businesses of all kinds. So with advancing technology, the aviation industry sustains growth becoming an even more effortless process for passengers to fly. Ask anyone who fly’s or has flown, a more efficient and straightforward operating commercial flying system is desirable. From buying tickets online, checking in, baggage claim, and waiting to board your flight—there is always something the industry could be doing to improve the experience of its customers; and with the many new trends emerging it is becoming possible. Airlines tasked with identifying what patterns would contribute to enhancing business efficiency as well as improving customer experience. Therefore, the Internet of Things (IoT), automation, Virtual Reality (VR), and Big Data are some of the most significant trends impacting how we fly today.
The Internet of things (IoT) has been one of the leading advances in the aviation industry. The IoT refers to a concept of connecting all physical objects via a network. A system of interrelated computing devices, mechanical and digital machines, objects, animals or people provided with unique identifiers. The identifiers have the ability to transfer data over a network, enabling seamless collection and exchange of data without the requirement of human-to-human or human-to-computer interaction. With this advance, IoT is helping to offer the best customer service possible and are making flights more safe, efficient and enjoyable for the passengers. We also have automation; it allows for airlines across the globe a chance to increase their services. Utilizing the automation gives a faster and more convenient travel experience with less tedious manual processes. Moreover, it has proven to be useful in many areas of the aviation industry, though the most critical areas have come to include: passenger reservation, ticket processing, cargo management, and in-flight services. Therefore automation has already made a significant impact on the industry and airlines are already taking advantage of this trend. For instance, Swiss International Air Lines now offers automated check-in. At there carrier, flyers have their ticket sent directly to the phone, allowing customers to skip the ticket processing lines and in turn making it more convenient and practical process.
Furthermore, Virtual Reality has also made a lasting impact in the industry, and not only has it made things more fun but it also has made it easier for airlines to collect data on customers; giving them a competitive edge when constructing offers. One carrier in particular that has taken advantage of this technology is Qantas; an Australian airline that’s partnered with Samsung to offer devices to passengers on its flights. Now, passengers are immersed in movies, games, and more—all from 40,000 feet in the air. It also offers a new and captivating way to preview destinations. Additionally, big data has shown to send personalized offers to customers in real-time and bases the offers on purchased industry, travel itineraries, and search tendencies to name a few. Even more crucial, is its ability to assist in detecting when something may be wrong with the aircraft—before it goes wrong. Also, calculate the most efficient flight path, taking in consideration the terms of time, safety, and fuel use. Though airlines have always been excellent at obtaining data, they are just now using it to benefit themselves and the customer. The airline that is taking advantage of this technology is the American carrier, United Airlines. They focus on the individual customer and his or her preferences for personalized travel services and products. To achieve this data, it requires constant analysis of data at every point of contact within the airline. From check-in to baggage claim data is being collected to offer the best possible service for that particular flyer. Lastly, Artificial Intelligence (AI) has made a minor impact in the airline sector as well with it being used to aid in managing revenue and aircraft maintenance. The UK-based easyJet has used AI for predictive analysis to help the airline make sense of all the data available. In doing so, the carrier has then created services that remember and organizes the info to where it can fill out all the information for flyers making it a more comfortable and quicker process to fly.
As you can see, technology continues to advance and revolutionize the way we fly and interact with the airlines like never before. Instead of being just another passenger boarding the plan, technology has made it possible for tools to characterize and take into consideration what is most important to that individual passenger. All around, it has made flying more convenient and productive for the workers and customers alike. So stay tuned—flying is only getting better as technology improves.
Types of Aviation Industry Business Loans Loans:
Most aviation companies, aviation flight schools, aviation repair companies and aviation manufacturers will seek some sort of debt financing at some point in time to help cover costs of operations, expansion of the company (including acquisitions), debt refinance and consolidation and general working capital purposes. Below we will take a look at some of the financing options available for aviation companies.
Aviation companies seeking financing for long-term working capital and capital investments tend to seek-out a conventional or alternative term loan because the structure allows the debt to be serviced over a longer amortization period than most other debt financing facilities. Lenders that offer term loans to aviation companies include conventional banks, institutional lenders, asset based lenders, private lenders and other non-bank commercial lenders.
|Funding Amounts||Up to $50,000,000|
Line of Credit
A very use financing tool in that the borrower is preapproved for readily-available capital without having to go through additional underwriting from the bank or lending institution. Additionally, a line of credit can save the aviation business money since they won’t be required to pay interest on capital that isn’t drawn.
|Funding Amounts||Up to $50,000,000|
Asset Based Financing
Asset based lending good type of commercial financing for companies that may lack the credit quality that conventional lenders require, and for companies that have strong balance sheets and would like to monetize the equity in their assets (such as commercial real estate, accounts receivable, inventory purchases, and equipment & machinery
|Funding Amounts||Up to $50,000,000|
Factoring involves the sale of a company’s accounts receivables to a factoring company in exchange for immediate financing at a discount to the factor. This type of business financing isn’t considered a loan but a business-to-business transaction, therefore the interest rate isn’t calculated using an APR but instead use a factor rate. Factoring companies will purchase the invoices, forward a percentage of the invoice’s value, withhold a fee for themselves, and then provide the borrowing company with the balance of the invoice’s value once the customer pays the invoice.
|Funding Amounts||Up to $5,000,000|
Accounts Receivable Financing
Accounts receivable financing is similar to factoring in that its based on a company’s 0-90 accounts receivables. The main difference is that unlike factoring, accounts receivable financing doesn’t involve the actual sale of receivables or invoices. Instead, the A/R is used as collateral for a line of credit. Once the line of credit facility is provided, the lending company will monitor the company’s AR to check for dips and increases – and will then adjust the facility accordingly.
|Funding Amounts||Up to $10,000,000|
As you can see there are many business loan options available to aviation companies seeking financing. The key is to find the right lender offering the best financing so as to ensure you are debt servicing the least amount of money so that you can better manage cash-flow. If you would like to learn about all of the funding options for aviation industry businesses, and need help navigating the process, please reach-out to one of our aviation industry business loan specialists, and we’ll help place you with the best lender.