JA Mitsui Leasing Capital Corporation (JMCC), one of Japan’s 10 largest leasing companies, has started offering business jet finance in the US.

The Japanese financier has been in the US for more 40 years. Its $3bn portfolio consists of small ticket to large ticket, fair market value leasing, and working capital financing.

JMCC has hired Jeffrey Dunn as senior vice president in its new corporate aircraft finance group. Dunn started in aircraft maintenance serving in the US Air Force before moving to business aviation where he worked at SAI Valuations (where he became an accredited ASA appraiser), CIT Business Aircraft,  Citizens Bank, PNC Aviation Finance and Truist.

“We are backed by our shareholders The Norinchukin Bank (A/A1) and Mitsui & Co (A/A3), which provide strong access to capital,” says Dunn.

CJI: Why JMCC moving into corporate aircraft finance?
Dunn: JMCC is looking to grow our business in North America. Not only is corporate aircraft financing complementary to our current equipment finance offering, but we can also provide value added services to clients that we have not been able to reach before. We believe the corporate aircraft finance market will continue to grow and become another stable pilar in our product offerings to develop long-term relationships with quality clients.

CJI: What sort of aircraft and borrowers are you looking to finance?
Dunn: Our customer base comprises of companies that span the entire investment-grade spectrum and slightly below – think BB- (speculative) to AAA (very strong), or equivalent.  This gives us the ability to offer attractive lending terms to our customers and at the same time diversify our portfolio with lower-risk assets. Additionally, while we have a specific focus on growing our US portfolio, our abilities extend further into North America and, in some cases, beyond.

Regarding the asset – we look at each opportunity with “fresh eyes”.  There are many benefits to having a new aircraft from the manufacturer as collateral – fresh starts on condition and pedigree, lower maintenance costs and warranty, advanced technology and efficiency, overall better marketability, and resale options to name a few. Though, the advantages of financing used aircraft cannot be overlooked – lower purchase prices, reduced depreciation risk, proven operational history and established market value immediately come to mind. We want a well-balanced portfolio.

While it is very common to see financial institutions limit their aircraft offerings by age and amortisation of the asset, we take a different approach:  we like to look at the specific opportunity and figure out how we might be able to help the customer.  While age and pedigree are important factors that are considered, we recognize the value proposition in aircraft that have experienced some depreciation already.  We are very collaborative at JMCC and have a higher degree of flexibility than a lot of other lenders – this gives us the ability to be creative with what we offer in this space.

CJI: What advice would you give to someone looking to finance an aircraft?
Dunn: Financing an aircraft is a significant commitment, and it is important to approach it strategically.  First and foremost, work with a lender that specializes in aircraft financing – make sure the lender has a deep understanding of aviation’s unique financial aspects, such as aircraft valuation, resale markets, and operational costs.  

Additionally, work with lenders that know and understand the asset.  Aircraft lenders with a deep understanding of the actual aircraft will have the ability to offer financing structures that are specifically suited to the needs of aircraft owners, such as flexible repayment schedules or balloon payments.  An informed lender may also be more willing to negotiate favorable terms and conditions, knowing the aircraft’s value and the customer’s needs.  A lender who understands aircraft can offer a more seamless and advantageous financing experience, tailored to the unique aspects of aircraft ownership.