Hi,
when can I take out a loan?
I would like some more money to invest in leasing out more planes.
I currently have AAA rating in all financial categories and am running at a profit, my margin before depreciation is around 50% so I think I would be able to start investing.
The message that comes up tells me that lenders are not willing to loan money yet.
Is there any other way to make some cash?
Are there any other ways of getting some capital that I can invest?
not yet. keep growing by leasing. you need to increase your equitty. check your accounting page. I think the limit is 20 million, but I might be wrong.
Buying aircrafts on credit or investing in stock of another airline have a much lower rate of return than leasing aircrafts and putting them on good routes - particularly early on. I can't stress enough: do NOT buy on credit !
To be eligible for loans without securities you need at least 10,000,000 AS$ in buildings and flight equipment on your balance sheet, and even then you will just get a tiny 200,000 AS$. Don't bother with these. Buying aircraft on loan is pointless as well because of the huge interest rates you are faced with and the inflexibility if you need to change your fleet.
In the beginning do not buy aircraft because you could spend that money on better things. Personally I also thought that when I had over 10 million in securities I could take big loans but that is not true. I have about 150 million in securities and can just take about 80 million in loans at interest of 1.5% which is quite helpful when starting a new subsidiary and urgently needing money.
Thank you for your replies...
I've just reread my post and realised that what I wrote is not what I intended to communicate.
By investing, I meant investing into some new planes and therefore, leasing them (I am aware that buying planes has numerous significant disadvantages not to mention the capital required).
I want to push into larger, commercial jets, Airbus, and need more than a couple million to effectively use it without going going bankrupt, especially with $1 million worth of loans at the end of the week and another $1 million in salaries.
Unless you're buying airplanes (which in the beginning you shouldn't), you won't be able to get a loan until after several months, as you'll need some collateral to use against the loan - in this case lots of seats. That's just how it is, unfortunately.
I know the waiting for growth at the beginning can be frustrating. Trust me, we've all been there. Don't worry about the loan, just focus on making the airplanes you have profitable. So long as they have some profit you should let the money grow week by week and eventually you can afford bigger planes.
And if the planes you have now are flying at a loss, then you need to either change your planes or change your routes. Or maybe find someone willing to lease you planes at a cheaper rate.
I do not understand why profit margin is also accounted in loans, usually in real life that is what you look for when investing in startups.