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How the

Process Works

Purchasing

Aircraft Selection

Before reviewing actual listings – potential buyers should undertake an in-depth and realistic analysis of their travel needs and budget. One of the most common mistakes buyers make when searching aircraft, is not taking the time to understand each individual set of requirements. Echo assists you in defining your needs, budget and expected usage of the aircraft – finding what works best for you.

Letter of Intent & Deposit

The letter of intent sets the tone for the entire transaction. It shapes the structure of the deal and it puts the details which have been discussed in writing. We draft and present on behalf of our customers, to specify the purchase price being offered for the aircraft, the scope of the pre-purchase inspection and location of inspection, the condition provisions and the deposit to be sent into escrow upon execution of the letter of intent.

Pre-Purchase Inspection

A technical adviser oversees this stage of the transaction. Echo has a network of licensed aircraft engineers, specializing in model-specific analyses, providing a list of detailed deficiencies & discrepancies with an indication of cost rectification. This list is the basis for any negotiations to fix the deficiencies or reduce the listing price.

Purchase Agreement

The Purchase Agreement covers all the terms including: the identity of the parties to the contract, the final purchase price, the deposit amount, terms of any refunds, the timing of closing, representations and warranties, the delivery location & more. If customers don’t already have an aviation attorney, Echo can recommend an attorney who is experienced in such transactions. Their expertise is essential to prevent any legal and tax implications that may arise from the outcome of the purchase agreement.

Technical Acceptance & Closing

This occurs after the inspection has occurred and any remediation or price adjustments have been agreed upon. The buyer executes the technical acceptance and the deposit usually becomes non-refundable at this stage. Money then moves in and out of escrow so the title to the aircraft can be transferred. Aircraft is then registered to the new owner, followed by insurance purchasing and finally, the aircraft is physically transferred to the new owner.

Echo is there along the way to ensure the smoothest process.

Financing

Source of Funds

Customers should determine early on what source of the funds they will use to close the aircraft purchase. Although many of our customers have the liquidity on-hand to close their purchase, it may be in their best interest to rely on third-party funding to keep their liquidity for higher yield opportunities. Echo matches our aircraft buyers/owners with lenders, leveraging our industry relationships with an extensive network of lenders, so customers can focus on running their business. Echo does the work to save you time, energy and money.

Request for Proposal & Deal Negotiation

Echo can help you find your optimal deal structure – whether it be a loan, lease, credit-based or asset-based financing. Echo will help you gather the information required by financiers and submit your application to request proposals from interested lenders. Upon selecting the lender, Echo will negotiate the best deal for you. Once we have a preferred proposal, you will then be asked to provide executed copies of the proposal and in good faith, deposit to the lender.

Aircraft Appraisal

It is required that the aircraft be physically inspected by an approved third-party aviation appraiser. They will review the general condition of the aircraft, inspect the logbooks and confirm the aircraft specifications. The appraiser will issue a report to the lender stating the appraised value of the aircraft.

Commitment

Lenders will complete their financial, legal and tax review of the transaction, including its parties prior to obtaining required internal approval needed to issue a commitment letter. Echo will negotiate the final terms of the approval before its execution by the customer.

Closing & Administration

Once the commitment letter is executed, the final financing documents are prepared by the lender’s counsels and reviewed by the customers and their respective counsel. Echo can recommend an attorney who is experienced in such transactions and assist the parties in the closing stages of the transaction.