San Francisco-based business aircraft financier AirFinance launched a new online general aviation finance marketplace here at NBAA that it believes could revolutionize the industry. Known as FlyFunder (Booth 3293), the new service promises to match buyers of business aircraft and helicopters with aviation financiers based on their borrowing profiles, in essence streamlining the current “shopping” process that consists of numerous phone calls and emails.
According to the company, each participating lender will input a list of specific attributes for deals that they will consider financing, including deal size, age of the aircraft, region of operation, registration of aircraft, and type of deal structure. When a deal matching those criteria enters the system, they will receive notification, and can then contact the potential customer to express interest in financing.
The initial process is anonymous, and when a deal inquiry is launched, the information presented to the lender is general and non-specific. Financiers will declare their interest based on the particulars of the deal rather than the identity of the customer. “Eventually, after we match, then the buyer and financier do meet, but only after the buyer approves of releasing his or her identity to the financier,” Kirsten Bartok Touw, FlyFunder co-founder and AirFinance managing partner, told AIN. Once a dialog begins, they can continue to communicate and share documentation through the site’s secure messaging and upload system.
“FlyFunder will give financiers greater visibility into a larger number of aircraft financing opportunities than they would typically see through their origination teams,” said Chris Miller, managing partner of Shearwater Aero Capital, one of the first lenders to sign on. “It is a great platform for buyers looking to access financing, and financiers looking for potential deals they might otherwise not have been exposed to.”
The site is free for all users to join, and lenders will pay FlyFunder a commission only upon the closing of a deal sourced through the platform. Its proprietors are looking to encourage the use of the digital marketplace by the aircraft/broker community as well, and to that end, on any completed financing deal launched by a broker/consultant, FlyFunder will pay them half of the commission paid by the lender.
“We see significant growth potential in both mature and emerging markets,” said FlyFunder co-founder and director Paul Sykes. “We believe that a transparent, easy-to-use, online marketplace will provide aircraft buyers globally with greater access to financing and more options to choose from. All industry participants will benefit from greater connectivity and interaction.”
Changes to the current aviation finance market include the recent or imminent departure of major names such as GE Capital and CIT, and retrenchment of others such as Element Financial. The brain trust behind FlyFunder believes it is now more difficult for aircraft buyers to find financing solutions. This is particularly true outside the core areas of North America and Western Europe, as well as for older and smaller business aircraft. Likewise, the company noted, OEMs’ marketing teams are often left searching for customer financing options in order to close a sale.
“It has been demonstrated that when financing exists, sales of assets increase, when they don’t have to be purchased with 100 percent equity,” said Touw. “It is our hope that FlyFunder can help increase aircraft sales by working to fill the financing void that has grown in the last few years.”
According to the company, it has already been approached by non-traditional funding sources such as hedge funds that are interested in seeking aircraft funding opportunities that historically they would not have been able to source, due to their lack of exposure to the sector. The marketplace has already seen more than a dozen funding inquiries launched from the U.S., and as far away as Sri Lanka and South Africa.