Closing a Business Jet Purchase: LOI, Escrow, and Delivery Explained

The existing posts on this blog cover choosing an aircraft, reviewing the logbooks, running the pre-purchase inspection, and negotiating the price. This one covers what happens after “we have a deal” — the closing process that turns an agreement into an aircraft in your name. It is where deals quietly fall apart, and where structure protects you most.

The letter of intent frames the deal

Once price is broadly agreed, the transaction usually opens with a letter of intent (LOI): a short, typically non-binding document setting out the agreed price, the deposit amount, the scope and location of the pre-purchase inspection, and the expected timeline. The LOI doesn’t bind you to buy — it signals serious intent and defines the framework everything else will hang on. The binding terms come next.

The aircraft purchase agreement is where the real terms live

The purchase agreement (APA) is the binding contract. It specifies the delivery condition the aircraft must meet, who pays for any discrepancies found during inspection, how the deposit behaves if either party walks, and the exact conditions that must be satisfied to close. This is the document that determines what happens when the PPI surfaces a finding — and it almost always surfaces something. A well-drafted delivery-condition clause is what converts a PPI finding into the seller’s problem to remedy rather than yours to inherit.

The specific tax, title, and liability structuring in an APA is genuinely legal and financial work — it belongs with qualified aviation counsel and a tax advisor for your jurisdiction, not with a template. A buyer-side advisor coordinates that team and makes sure the commercial terms you negotiated survive into the contract.

Escrow protects both sides

Aircraft transactions almost always close through an independent escrow agent. The escrow agent holds the buyer’s deposit and, at closing, the full purchase funds, along with the title and closing documents. Nothing releases until every agreed condition is met — and then funds and title transfer simultaneously. Neither party has to trust the other to move first, which is precisely the point. Using a reputable, independent escrow and title company is one of the few parts of the process that is close to non-negotiable.

Technical acceptance is a decision, not a formality

After the PPI and any agreed rectification work, the buyer issues technical acceptance: a formal confirmation that the aircraft meets the delivery condition set out in the APA. This is the moment the buyer agrees the aircraft is ready to close — and it should never be signed under time pressure. Any discrepancy still open at technical acceptance is a discrepancy the buyer is choosing to accept. If the delivery condition hasn’t been met, this is the point of maximum leverage to require it be met first, because funds have not yet moved.

Closing and delivery

At closing, the escrow agent releases funds to the seller and title to the buyer, the aircraft is formally delivered (often accompanied by a technical acceptance flight), and registration transfers to the new owner or ownership entity. Only after registration and closing documents are complete is the aircraft genuinely yours.

Why the close is where buyer-side representation earns out

By the closing stage, the seller’s broker wants one thing: funds released, fast. That’s when a clean, quick close pays their commission. A buyer-side advisor has the opposite job — making sure no condition is waved through, no delivery-condition clause is quietly softened, and technical acceptance isn’t signed a day early to keep a timeline.

We manage the LOI, coordinate aviation counsel and escrow, and hold the line on delivery condition through technical acceptance on every acquisition we advise on — it’s the final stage of how we work. See our free acquisition guide for the full process, or request advisory on a specific transaction.