An aircraft security agreement is a legally binding contract that establishes a lender’s interest in an aircraft as collateral for a loan. In essence, it’s a document that protects the lender’s financial stake by granting them a security interest in the aircraft until the borrower fulfills their loan obligations.
Much like a mortgage on a home, this agreement ensures that if the borrower defaults, the lender has the right to repossess or take legal action regarding the aircraft. For individuals or businesses financing the purchase of an aircraft, this form is a critical part of maintaining compliance and ensuring all ownership and financial records are properly recognized by the Federal Aviation Administration (FAA).
Who Needs an Aircraft Security Agreement?
Aircraft ownership often involves significant investment, which is why financing through banks, leasing companies, or private lenders is common. Anyone purchasing an aircraft through a loan or any kind of financing arrangement will typically need an aircraft security agreement. This includes:
- Private individuals purchasing personal aircraft.
- Aviation companies financing fleet expansions.
- Charter services or corporations using aircraft as business assets.
- Lenders, lessors, or financial institutions that need to establish a claim in the event of default.
In each of these cases, the agreement functions as a safeguard for both parties. For the lender, it provides legal standing should repayment obligations not be met. For the borrower, it formalizes the loan structure and ensures transparency in the FAA’s records of ownership and encumbrances.
Without the proper filing, a lender’s interest may not be legally enforceable against third parties, leaving both the lender and borrower in uncertain legal territory.
Why the Agreement Is So Important
Having a properly recorded aircraft security agreement helps maintain the integrity of the aircraft registration system. It ensures the aircraft’s title reflects any liens or encumbrances. If you are purchasing a used aircraft, the existence (or absence) of such an agreement on record can significantly affect your ability to transfer clear title.
If a borrower fails to record a security agreement when required, several problems can occur:
- The lender’s interest may not be protected under FAA or state law.
- The borrower could face delays or denials in processing ownership transfers.
- Financing terms may become invalid or unenforceable.
- The aircraft’s title may appear “unclear” during resale or refinancing.
Because aircraft ownership and financial responsibility are federally regulated, unrecorded liens can complicate FAA documentation and even prevent lawful operation of the aircraft under its registration.
What Happens If You Don’t File an Aircraft Security Agreement
If you are required to file this agreement and fail to do so, you could encounter significant legal and financial issues. The lender could lose the ability to claim their secured interest in the aircraft, which may lead to disputes or lawsuits. For the borrower, that could mean severe credit damage, repossession complications, or difficulties renewing FAA registration in the future.
Additionally, an aircraft with an unrecorded lien may face barriers in being sold or exported. According to FAA guidelines, any recorded security interest becomes part of the aircraft’s public record, which helps ensure transparency and avoids disputes down the line. You can review the applicable federal regulation concerning aircraft ownership changes and lien satisfaction.
Other Documentation You May Need
When submitting an aircraft security agreement, other documents are often required to ensure the FAA can accurately process and record the lien. Depending on your specific situation, you may need to include:
- A copy of the aircraft bill of sale or ownership transfer documentation.
- A current certificate of aircraft registration.
- Details of the financing agreement, including the loan amount and repayment terms.
- Any prior recorded security agreements or lien releases, if applicable.
- Proper signatures from both borrower and lender.
Having accurate and complete supporting documentation can prevent delays in FAA processing. Missing details or mismatched ownership information can lead to rejections or requests for resubmission.
How the Aircraft Security Agreement Relates to Aircraft Registration
Every security agreement must correspond with a properly registered aircraft. If the registration isn’t current, or if ownership details don’t match, the FAA may not accept the filing. That’s why maintaining up-to-date aircraft registration and ensuring timely FAA registration renewal are essential steps before submitting your agreement.
Aircraft registration establishes ownership in the eyes of the FAA, while the security agreement records a lender’s financial interest in that ownership. These two records work together to create a full picture of legal responsibility for the aircraft. Neglecting either part of this process could create gaps in ownership verification, especially when transferring or refinancing the aircraft.
The Filing Process and How We Help
Filing a security agreement with the FAA requires precision and attention to detail. Our team at the National Aviation Center makes this process far easier by providing an online platform that eliminates the need for mailing paper forms or dealing directly with government processing delays.
When you use our secure, encrypted portal, you can:
- Complete your application digitally from anywhere.
- Upload supporting documentation directly through the site.
- Ensure that your agreement is properly formatted and complete.
- Have your submission reviewed for accuracy before it’s transmitted.
We designed our system to simplify FAA filings and help you stay compliant with all aviation documentation requirements. Whether you are an individual owner or a corporate fleet manager, our service ensures your agreement is properly prepared and submitted for FAA review.
Secure Your Aircraft Documentation Today
The aviation industry continues to evolve, and so does the process of managing documentation. Traditional paper filing is slow and prone to human error. With our online submission system, we’ve made it easier than ever to handle everything from aircraft registration renewal to submitting or releasing a security agreement.
Our goal is to provide a one-stop online resource for aviation documentation. Whether you need to file ownership transfers, register a new aircraft, or update an existing record, we streamline every step so you can focus on flying—not paperwork.
At the National Aviation Center, we understand that each form represents a significant step in maintaining your aircraft’s legal and financial standing. That’s why we’ve developed an easy-to-use, fully encrypted portal designed for accuracy and convenience.
If you’re ready to file your Aircraft Security Agreement, you can start the process now through our secure form submission system.
We also provide access to other essential FAA documentation forms to help with every stage of ownership and registration. Explore our portal to see how we can support your compliance needs and keep your aviation records accurate, secure, and up to date.