Aviation operators have some unique needs, but from a lender’s seat, ground support equipment (GSE) and hangar assets mostly fall under specialized equipment financing.
Here’s a clear breakdown of the main options you’d typically use to finance things like tugs, GPUs, de-icing rigs, baggage tractors, dollies, and hangar fit-outs.
Common financing structures for GSE and hangar equipment
Equipment lease (most common for GSE fleets)
For moveable equipment with clear serial numbers (tugs, belt loaders, GPUs, de-icers, pushback tractors, ground power units), a capital or operating lease is usually the first stop.
- Fixed term: often 36–84 months, matched to equipment life.
- Payments: predictable monthly payments, sometimes seasonal structures if you’re very tied to winter or holiday peaks.
- End of term: can be $10 buyout, fair market value, or similar options.
- Tax: payments may be fully deductible as an expense (confirm with your accountant).
Leasing works well if you:
- Need to refresh GSE regularly to meet reliability standards or airline contract requirements.
- Want to preserve working capital for fuel, staffing, and maintenance.
- Don’t want the equipment sitting on your books as long-term debt.
Equipment term loan (for long-life / permanently used assets)
If you expect to use the same equipment for many years and prefer ownership from day one, a term loan can make sense.
Typical use cases:
- High-value, long-life GSE (de-icing trucks, high-reach lifts, specialized fire/safety equipment).
- Ground handling companies with long-term service contracts at specific airports.
- Airport tenants with strong financials who want the asset on their balance sheet.
Key features:
- Fixed or variable interest rate.
- Amortization matched to useful life (5–10 years for some heavy GSE).
- The equipment itself is primary collateral; personal or corporate guarantees may still be required.
At Mehmi, we usually compare lease vs loan for clients to see which structure reduces total cost while fitting their tax and cash flow goals; feel free to contact our credit analysts if you’d like to model both.
Sale-leaseback on existing GSE
If you already own some GSE outright, you can unlock capital without losing operational use through a sale-leaseback:
- Lender buys your existing equipment (based on appraised value).
- You lease it back over a fixed term.
- You get a cash injection now to fund:
- Additional equipment for a new airline contract.
- Hangar upgrades or safety improvements.
- Working capital for ramping operations at a new airport.
This is useful when you’re asset-rich but cash-constrained and don’t want to dilute equity or take on short-term, high-cost debt.
Financing hangar fit-out and infrastructure
Hangar projects are trickier because a lot of spend is tied to real property and leasehold improvements. Commonly financed items:
- Hangar doors and door motors.
- Fire suppression systems.
- Compressed air, electrical, and lighting systems.
- Specialized maintenance equipment, jacks, stands, and tooling.
- Office and parts storage fit-out.
You generally see two approaches:
- Lease/loan on discrete equipment
- Anything with its own serial number and resale value (e.g., jacks, tooling, scissor lifts) can often be financed like regular equipment.
- Term loan for leasehold improvements
- For structural work (doors, heating, fire systems), lenders may structure this as a business term loan secured by:
- The improvements themselves,
- A general security agreement, and
- Corporate/personal guarantees.
If you’re planning a larger hangar project, you may want to combine equipment financing for moveable assets with a separate facility for the build-out so you’re not overcomplicating a single deal.
Working capital tools that support aviation operations
Aviation and ground handling businesses tend to be contract-heavy and cash-flow sensitive. Pairing asset finance with working capital solutions often makes the whole structure safer and easier to approve:
- Operating line of credit or working capital loan
Helps bridge timing differences between fuel, payroll, parts, and slower-paying airline or MRO customers. You can explore options like Mehmi’s Line of Credit & Working Capital if you’re funding day-to-day operations alongside equipment growth. - Invoice factoring
If you bill airlines or larger contractors on 30–60+ day terms, factoring lets you advance on those receivables to smooth cash flow, instead of using expensive short-term loans. Mehmi offers invoice factoring solutions that can sit beside your equipment leases.
General rule of thumb:
- Use leases/loans for long-lived GSE and hangar assets.
- Use LOC/factoring to handle payroll, fuel, and parts while waiting to get paid.
What lenders look for in aviation/GSE files
From a credit analyst’s perspective, good aviation-related files usually include:
- Clear equipment lists and vendor quotes (serializable GSE, install costs split out).
- Details of airport or airline contracts (length, termination clauses, expected volume).
- Evidence of regulatory compliance and insurance.
- Recent financial statements and bank statements to show cash flow and seasonality.
- For newer companies, relevant industry experience of owners or management.
If you operate across multiple airports or are scaling up for a major new contract, you may also want to show:
- A rollout plan (how quickly you ramp staff and equipment).
- Conservative cash flow projections that include new lease/loan payments.
Putting this together up front usually leads to better terms and fewer back-and-forth questions from underwriters.
Where Mehmi fits in
Mehmi Financial Group can help aviation and ground handling businesses across Canada finance:
- Ground support fleets (tugs, tractors, belt loaders, GPUs, de-icers).
- Hangar equipment and selected fit-out items.
- Supporting assets like service vehicles or workshop equipment.
We work with 30+ Canadian lenders and can combine equipment financing, refinancing/sale-leaseback, factoring, and working capital into one plan tailored to your growth path.
If you’re planning a new ground handling contract, hangar expansion, or equipment refresh and want to see what’s realistically financeable (and on what terms), feel free to contact our credit analysts for a detailed review and options.
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