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Helicopter finance options have changed over the decades. In the 1970s, if you wanted to buy a helicopter, you often went to your local bank or credit union, or the OEM’s captive finance arm or affiliated bank. In the 1980s, we saw the rise of general partnerships that took advantage of tax credits to fund helicopters. By the 1990s, many helicopters were funded by non-banks (GECC was probably the best-known example of this). In response to the financial crisis, in the 2010s, a metamorphosis occurred. That led to the creation of operating leases, which became prevalent in the helicopter finance industry. This growth and diversification of financing options has created an increased need for helicopter valuation services.
While the laws, taxes and financial regulations governing aircraft transactions don’t differentiate between helicopters and fixed-wing aircraft, helicopters are different. Their unique qualities require specialized knowledge to perform a valuation properly. To obtain the most accurate results for your purposes, you will need to understand how to choose among the value solutions available, when and why you should invest in a formal valuation, and how you can find an experienced helicopter appraiser.
When and in what instances is it wise to invest in a formal appraisal?
- Estate settlement
- Stock offering
- Venture capital
Why should I invest in a formal helicopter appraisal?
You wouldn’t invest in a home or business without a detailed and thorough valuation, even if you felt you knew their condition and understood the risks involved. Plus, you’re not likely to obtain funds for such an undertaking without one.
Similarly, a helicopter is a significant investment that should be properly analyzed by an expert in the helicopter industry. Appraisers can offer perspectives and knowledge that you may not have considered. An appraiser specializing in helicopters can provide you with confidence in your investment. They can give you a detailed picture of the aircraft in terms of its overall condition, component usage and current market conditions, as well as the anticipated future of the helicopter industry and where your specific model, fleet or even parts inventory fits into that future.
How do you choose a helicopter appraiser?
Experts who specialize in helicopter valuation are harder to find than those who perform appraisals for fixed-wing aircraft or other types of machinery and equipment. It’s not unusual for someone who is not experienced in helicopters to claim they are capable of correctly assessing your aircraft. However, an inexperienced appraiser can easily skew your value result by millions of dollars. Therefore, it is critical to be cautious when choosing an appraiser. Asking the right questions may help you decide.
Questions that may help you decide if the appraiser is qualified for your helicopter valuation:
- On average, how many helicopter appraisals do you perform each year?
- What is your appraisal methodology?
- How do you gather comparable sales information?
- Do your reports comply with the Uniform Standards of Professional Appraisal Practice or the International Valuation Standards?
- Are you accredited by any appraisal organization?
- Do you have any specialized training or background that makes you more knowledgeable or experienced than other appraisers/appraisal services when it comes to helicopters?
- How familiar are you with the laws and regulations that govern this transaction?
- Do you buy, sell or broker helicopters? (This may indicate a potential bias.)
Ask for a resume and review it for qualifications, education and knowledge (including continuing education and accreditations). Check for experience (number of years and positions held in the industry) and indications of professional respect (such as honors, awards, published articles).
When is a formal appraisal more than you need?
There are times when a formal appraisal may be more than you require. Usually, this is when you’re in the preliminary stages of considering a transaction or need something informal for internal evaluation purposes. This is when you should look at more cost-effective options. However, before choosing a free online resource, consider that free products tend to have limited data and are often out-of-date or inaccurate.
A reliable and cost-effective option in these situations is The Official Helicopter Blue Book or an automated valuation model like HeliCalc. Both are practical alternatives to a formal appraisal and can assist in making initial transaction decisions.
HeliValue$ has created a team of valuable personnel and a diverse range of products to help you address all your appraisal needs. Our experienced, accredited staff can provide single and fleet valuations, on-site services, and inventory appraisals for any purposes.
For more information about our services, or for a free sample of The Official Helicopter Blue Book or our online automated valuation model HeliCalc, visit us at helivalues.com.