Debt is the fastest way to grow and the fastest way to die. The loan desk will lend to anyone with room under the ceiling; the pricing, not a rejection letter, is how risk shows up.
How a loan is priced#
You choose an amount and a term, by default 13 to 208 weeks (your world may differ). The interest rate is not negotiable; it is computed from your leverage:
- Every world has a hard debt ceiling per airline (by default $80M; your world may differ). You can never borrow past it.
- The rate is a base rate plus a risk spread that scales with how much of the ceiling your debt would use after this drawdown, by default 7% base plus up to 8% spread (your world may differ). Borrowing your first million is cheap; borrowing near the ceiling costs close to the full spread.
- The quote you see before confirming is exactly what you will pay: annual rate, weekly payment, and total interest over the term. Nothing changes between quote and signature.
Because each loan is priced at your leverage after it, order matters: many small loans taken as you grow price better than one giant one taken up front.
Living with the annuity#
Repayment is a fixed weekly payment, automatically drawn. Each payment splits into interest (a real cost on your income statement) and principal, which only reduces the balance sheet liability. Early in the term the split leans toward interest; it shifts toward principal as the balance falls.
Two things the bank will not do: pause payments, and block them. Payments continue even if they push your cash negative, and negative cash starts the insolvency clock described in Bankruptcy & estates. Missed-payment weeks are tracked on the loan. You may also repay any loan early, in full, at its remaining balance: no penalty, and the interest you have not yet incurred is simply never charged.
Reading your debt position#
The Loans page shows the whole book: every loan with its rate, balance, weekly payment, payments remaining and maturity, plus three headline numbers: total debt, weekly service, and leverage as a percentage of the ceiling. The Upcoming Events calendar projects every payment forward alongside your other bills, with a marker showing how far today's cash reaches. Your financial rating grades the same picture through debt-to-assets and interest-cover ratios.
A working rule#
Weekly service is the number to respect. Revenue arrives only when flights complete, but the annuity leaves every week regardless, including the weeks a route is still filling its booking curve. Borrow against routes that are already earning, not routes you hope will. See Ledger & income statement for where interest lands in your P&L.