Is There Any Financing for Experimental Helicopters? A Comprehensive Guide

The aviation industry, particularly the experimental aircraft sector, has seen significant growth over recent years. Experimental helicopters are part of this niche market, drawing interest from hobbyists, innovators, and professionals in the aerospace field. However, financing these experimental aircraft can be challenging due to the inherent risks and unique nature of the industry.

In this comprehensive article, we will explore the various financing options available for experimental helicopters, discussing the challenges involved, potential lenders, and alternatives for securing funding.

Table of Contents

Understanding Experimental Helicopters

Experimental helicopters are typically non-certified aircraft that are either built by individuals (kit helicopters) or are prototypes developed for research and innovation. These helicopters are not produced by large manufacturers and therefore do not meet the rigorous certification standards set by aviation authorities such as the Federal Aviation Administration (FAA) or the European Union Aviation Safety Agency (EASA).

Because of their non-certified status, experimental helicopters often face restrictions in terms of insurance, resale value, and financing. However, they also offer opportunities for innovation, allowing builders and engineers to explore new technologies and designs without the limitations imposed on certified aircraft.

Challenges in Financing Experimental Helicopters

Financing an experimental helicopter presents unique challenges due to several factors:

Higher Risk: Since experimental helicopters are not certified by aviation authorities, lenders view them as higher-risk assets. This makes securing traditional loans more difficult compared to financing certified aircraft.
Limited Market: The market for experimental helicopters is much smaller than for certified helicopters, which affects their resale value. Lenders may be reluctant to finance an aircraft that could be difficult to sell in case of a default.
Regulatory and Legal Restrictions: Experimental helicopters are subject to stricter regulations, including limitations on their use for commercial purposes. This can limit the potential revenue streams that would normally reassure lenders in more traditional financing arrangements.
Insurance: Insuring experimental helicopters can be more expensive and less comprehensive compared to certified aircraft. The higher insurance costs may make financing less appealing to potential lenders.

Financing Options for Experimental Helicopters

Despite the challenges, there are financing options available for experimental helicopter enthusiasts and developers. Below are some of the most viable financing methods:

1. Personal Loans and Equity Financing

Since securing traditional loans for experimental helicopters can be difficult, many enthusiasts turn to personal loans or home equity loans. These types of financing are not tied to the helicopter itself but rather to the borrower’s personal creditworthiness and assets.

Personal Loans: A personal loan can provide the necessary capital for purchasing or building an experimental helicopter. These loans often come with higher interest rates than secured loans, but they are easier to obtain if you have a good credit score.
Home Equity Loans: If you own a home, you can borrow against the equity in your property. Home equity loans tend to offer lower interest rates than unsecured loans, but they put your home at risk if you’re unable to make payments.

2. Specialized Aviation Lenders

Some financial institutions specialize in aviation financing and may be more willing to work with experimental helicopter owners. These lenders understand the unique nature of aviation assets and can tailor loan products to meet the specific needs of the borrower.

AeroCredit (U.S.): A financing company that offers loans for both certified and experimental aircraft. They provide flexible terms for aviation enthusiasts looking to finance their helicopter projects.
AirFleet Capital (U.S.): While primarily focused on certified aircraft, this lender has been known to finance experimental aircraft on a case-by-case basis, particularly if the borrower has a strong credit history.
AOPA Aviation Finance (U.S.): The Aircraft Owners and Pilots Association (AOPA) provides financing solutions for aviation enthusiasts. They offer loans for experimental aircraft, including helicopters, and work with various lenders to find the best options.

3. Manufacturer and Dealer Financing

In some cases, helicopter kit manufacturers or dealers offer in-house financing options. These loans are specifically tailored to the purchase of experimental helicopters, making it easier for buyers to secure funding.

RotorWay International: One of the leading manufacturers of kit helicopters, RotorWay occasionally offers financing options for buyers. They understand the specific needs of experimental helicopter enthusiasts and provide flexible payment plans.
Safari Helicopter: Known for its popular Safari 400 kit helicopter, Safari Helicopter offers financing through partner lenders. Buyers can finance their helicopter purchase directly through the dealer, making the process more streamlined.

4. Crowdfunding and Peer-to-Peer Lending

Crowdfunding platforms and peer-to-peer (P2P) lending networks have become increasingly popular for funding experimental projects, including helicopters. These platforms allow individuals to raise money from a large pool of investors or lenders, bypassing traditional banks.

Kickstarter: Crowdfunding platforms like Kickstarter have been used to fund various experimental aircraft projects. While Kickstarter is more suited for entrepreneurial ventures, it can be a viable option for experimental helicopter projects if presented with a compelling story and purpose.
GoFundMe: For more personal or passion-driven projects, GoFundMe can help raise money from friends, family, and the public. This is particularly useful for individuals looking to finance their helicopter-building hobby without taking on significant debt.
LendingClub: LendingClub is a popular P2P lending platform that connects borrowers with individual lenders. While not specifically focused on aviation, it provides a way to secure financing based on personal creditworthiness.

5. Government Grants and Research Funding

In some cases, experimental helicopter projects that focus on innovation, technology, or research may qualify for government grants or research funding. This is particularly true for projects that align with broader goals in aerospace development, environmental sustainability, or national defense.

Small Business Innovation Research (SBIR) Program: In the U.S., the SBIR program offers funding to small businesses that engage in innovative research and development. Experimental helicopter projects that demonstrate technological advancements could qualify for grants under this program.
National Aeronautics and Space Administration (NASA): NASA occasionally provides grants and funding for aerospace research, including experimental aircraft. Developers working on experimental helicopters that contribute to advancements in aviation technology may be eligible for funding.
Defense Advanced Research Projects Agency (DARPA): For experimental helicopters with potential military applications, DARPA offers grants and funding for cutting-edge research and development in aerospace technology.

6. Private Investors and Partnerships

In some cases, experimental helicopter developers may find private investors or business partners willing to finance their projects. These investors are often aviation enthusiasts themselves or see potential in the technology being developed.

Angel Investors: Angel investors provide capital to early-stage projects in exchange for equity or convertible debt. If your experimental helicopter project has commercial potential or represents an innovative breakthrough, it may attract angel investors.
Strategic Partnerships: Forming partnerships with other companies in the aerospace industry can also help secure financing. For example, collaborating with an avionics manufacturer or a technology firm could provide access to resources and funding.

Conclusion

Financing an experimental helicopter is no easy task, but there are several options available to enthusiasts and developers willing to navigate the challenges. From personal loans and specialized aviation lenders to crowdfunding and government grants, securing financing for experimental helicopters requires creativity, persistence, and a thorough understanding of the available resources.

As the market for experimental aircraft continues to grow, more financing options may become available, making it easier for individuals to pursue their passion for aviation. Whether you are building a kit helicopter for personal use or developing a prototype for commercial purposes, understanding the various financing avenues is the first step toward making your experimental helicopter project a reality.