A security interest in an aircraft engine can be perfected only in the manner required by federal law. Federal law excludes by preemption the recording of title to or liens against aircraft, so that a transfer that is not recorded under the federal system is not effective. Security Interests in Engines less than 550 horsepower are not eligible for recording. A security interest in an aircraft is perfected by filing with the Aircraft Registration Branch of the Federal Aviation Administration.
The Illinois Security Agreement Granting Security Interest in Aircraft Engine is a legally-binding document that establishes the terms and conditions for securing a financial interest in an aircraft engine located in Illinois. This agreement enables lenders and creditors to protect their investment by creating a security interest in the aircraft engine, which gives them the right to repossess and sell the engine in the event of default or non-payment. Keywords: Illinois, Security Agreement, Granting Security Interest, Aircraft Engine. There are different types of Security Agreements Granting Security Interest in Aircraft Engines in Illinois. These variations may include: 1. Purchase Money Security Agreement (PSI) for Aircraft Engines: This type of security agreement is used when a creditor provides financing for the purchase of an aircraft engine. The creditor obtains a security interest in the engine, becoming the primary lien holder until the loan is fully repaid. 2. Collateral Assignment Agreement for Aircraft Engine: In some cases, a borrower may already own an aircraft engine and pledges it as collateral to secure a loan or line of credit. The creditor and borrower sign a collateral assignment agreement, granting the lender a security interest in the engine. 3. Aircraft Engine Lease Agreement with Security Interest: When a lender leases an aircraft engine to a lessee, they may require a security interest in the engine to mitigate their risk. This type of agreement allows the lender to repossess the engine in case of default or breach of lease terms. 4. Subordination Agreement for Security Interest in Aircraft Engine: In situations where multiple parties have a security interest in the same aircraft engine, a subordination agreement establishes the priority of the security interests. This ensures that each creditor's rights are defined and protected in case of default or repossession. These various types of Security Agreements Granting Security Interest in Aircraft Engines in Illinois serve the purpose of safeguarding the interests of lenders while providing borrowers with the necessary financing to own or operate aircraft engines. It is imperative for both lenders and borrowers to understand the specific terms, conditions, and obligations set forth in these agreements to ensure compliance and facilitate a smooth transaction process.
