Industries
Shipping and aviation
Shipping and aviation funding is secured on the asset and supported by employment contracts. Providers weigh asset age, specification and technical management alongside the operator's accounts.
Shipping and aviation
- Vessel and aircraft acquisition finance
- Refinance and equity release on owned assets
- Charter and lease-backed structures
- Common structures
- Mortgage-backed acquisition finance, charter/lease-backed debt, sale and leaseback
- Typical facility size
- $2 million to $100 million+ per asset or small fleet
- Indicative pricing
- SOFR/EURIBOR plus 3–7% depending on age and employment
- Security
- First mortgage over vessel/aircraft, assignment of charter/lease and insurances
- Time to funding
- 6–14 weeks depending on flag, registry and diligence
The capital profile of shipping and aviation operators
Vessels and aircraft are high-value, mobile assets with long working lives but exposure to cyclical charter and lease markets. Operators typically carry a mix of owned and leased tonnage or fleet, and funding decisions turn as much on the employment status of the asset as on the operator's own balance sheet.
Capital intensity means acquisition or renewal decisions are infrequent but large relative to annual turnover, and financing terms — tenor, amortisation profile and residual value assumptions — need to be matched to the asset's expected remaining economic life and its likely resale or scrapping market.
Structures for vessels and aircraft
Acquisition and refinance facilities are secured by a first mortgage over the vessel or aircraft, with amortisation profiles built around the asset's age, class and expected residual value. Charter-backed or lease-backed structures size debt service against contracted income, giving lenders greater comfort than reliance on the spot or short-term charter market.
Sale and leaseback allows an operator to release capital tied up in owned tonnage or aircraft while retaining operational control, and is commonly used by specialist lessors as an alternative to conventional mortgage debt, particularly for younger, liquid asset types.
What lenders scrutinise in shipping and aviation
Age, specification, classification society standing and technical management quality are assessed alongside the operator's financial position, since resale value and ongoing compliance costs depend heavily on all three. Flag state and the jurisdiction of registration matter, as lenders generally require recognised, mortgage-friendly registries.
Employment terms are central: a vessel or aircraft on a contracted charter or lease to a creditworthy counterparty supports materially higher leverage than one trading on the spot market. Loan-to-value covenants, minimum liquidity requirements and restrictions on further encumbrance are standard features of transport asset finance documentation.
Common reasons applications stall
Financing older assets without a clear resale market, or vessels flagged in jurisdictions lenders do not recognise, frequently leads to declined or heavily discounted terms. A second common issue is presenting spot-market employment as if it were contracted income, which lenders will re-underwrite once verified.
Delays also arise where technical management arrangements are unclear or where classification and survey records are incomplete at the point of application.
How GFG structures shipping and aviation funding
GFG assesses the asset's age, specification, flag and employment position before approaching lenders and specialist lessors, matching the requirement to providers active in that asset class and jurisdiction. Where employment is uncontracted, GFG structures facilities around realistic leverage rather than pursuing terms unlikely to be approved.
For portfolio owners, GFG coordinates refinancing or sale-and-leaseback across multiple assets to improve overall terms and simplify security arrangements.
Is charter-free employment acceptable?
Yes, at reduced leverage; contracted employment materially improves terms.
Can a vessel or aircraft be financed without a long-term charter or lease in place?
Yes, but leverage is generally lower and pricing higher than for contracted employment, since the lender is more exposed to market rate volatility. Some lenders specialise in spot-market tonnage or aircraft and price accordingly, particularly for younger, liquid assets with an active secondary market.
What flag states or registries are generally acceptable to lenders?
Recognised, mortgage-friendly registries with established maritime or aviation law are preferred, including major international open registries and most national flags with a track record of enforceable ship or aircraft mortgages. Lenders are typically cautious about registries with limited legal precedent or enforcement history.
Is sale and leaseback available for a single vessel or aircraft, or only fleets?
Single-asset sale and leaseback is available, though specialist lessors often prefer newer, liquid asset types where the residual value is easier to underwrite. Portfolio or fleet transactions can achieve better aggregate terms due to diversification, but single-asset structures are a well-established part of the market.
How does technical management quality affect financing terms?
Lenders assess the technical manager's track record on maintenance, classification compliance and safety, since poor management increases the risk of off-hire periods, detentions or reduced residual value. A strong, recognised technical manager can materially improve both approval prospects and pricing.
Are older vessels or aircraft still financeable?
Yes, though typically at lower leverage, shorter tenor and closer monitoring, reflecting reduced remaining economic life and a narrower resale market. Contracted employment and a clear maintenance and survey record materially improve the terms achievable for older assets.