What Is Advance Rate in Aircraft Leasing?
Advance Rate defined for aviation professionals, with its operational or commercial use, document context and related terminology.
Definition, Documents and Application
Advance rate is the percentage of an aircraft's accepted collateral value that a lender is prepared to finance.
Aviation Glossary
Term: Advance Rate
Category: Aircraft Leasing & Finance
How It Affects the Transaction
The lender may apply the percentage to current market value, a lower of two appraisals or another eligible-value definition, then reduce it for age, jurisdiction, liquidity or technical risk.
Where the Term Appears
Advance Rate can appear in aircraft leases, loan agreements, security documents, appraisals, insurance provisions or closing deliverables depending on the transaction. The exact legal effect comes from the executed documents, governing law and the role of each party.
What to Review
Read the definition together with payment mechanics, default provisions, insurance, maintenance, return conditions, security and enforcement rights. A familiar label can have a different economic effect when the drafting or calculation method changes.
Related Aviation Topics
Related ACMI World coverage includes key terms in aircraft leasing contracts, business jet leasing, aircraft acquisition financing, cross-border jet lease terms and aircraft valuation and LTV.
The lender may apply the percentage to current market value, a lower of two appraisals or another eligible-value definition, then reduce it for age, jurisdiction, liquidity or technical risk.
Advance Rate FAQ
What does Advance Rate mean in aviation?
Advance rate is the percentage of an aircraft's accepted collateral value that a lender is prepared to finance.
Why does Advance Rate matter?
The lender may apply the percentage to current market value, a lower of two appraisals or another eligible-value definition, then reduce it for age, jurisdiction, liquidity or technical risk.
Where would an aviation professional encounter Advance Rate?
It is commonly encountered in aircraft leasing & finance documents, procedures, calculations or operating discussions where the underlying technical or commercial issue is relevant.
Does the term have the same meaning in every aircraft finance document?
No. Market terminology is useful shorthand, but the executed agreement controls. Defined terms, calculation methods, governing law and transaction structure can change the result.