Increased farm income pressures have led to increased demand for farm equipment leasing as farmers and OEMs look to find a balance in the market. 

Farmers continue to navigate farm income pressures caused by tariffs and rising prices, Joe Whorton, director of marketing at Duluth, Geo.-headquarter global agriculture equipment manufacturer Massey Ferguson, tells Equipment Finance News on this episode of “The Dig” podcast. 

“There's no doubt that net farm income continues to be tight, and so you've got these multiple years of inflationary pressure, you've got elevated input costs, you've got high interest rates and then tariff uncertainty that's stressing farmer cash flow,” he said. “It's really driven a pretty high uptick in leasing activity recently, especially when you talk about mid-range and high horsepower tractors reaching its highest levels in the last five years.”  

Over the past five years, Massey, a subsidiary of AGCO has gone from leasing 15% to16% of farm equipment to nearly double that amount, Whorton said. 
“Into 2025, we're up at almost 30% and the industry is actually higher than that — the industry is almost up at 40%,” he said. “Some of the growth for Massey that we've seen in leasing is industry-based and uncertainty-based, and then a lot of the uptick has come in the fact that we've had our residual values continue to improve.” 

The increased focus on meeting farmers' needs and ensuring a positive user experience has led to rising residual values for Massey's high horsepower products, Whorton said. 

“As a positive consequence and outcome, we can now offer farmers some of the most aggressive lease deals in the industry, and so we've seen that segment grow a lot,” he said. “With all the uncertainty I mentioned before, allowing our farming customers to maybe de-risk themselves in the near term by having that fixed cost of ownership or fixed payments there.” 

Tariffs can be considered a business problem, knowing the fact that we are a 1.4 trillion industry, and I would say close to 30 to 40% of the equipment probably is going to be impacted in some way, shape or form. Right in terms of data, crane, we cut across data, CRM and AI, it's there in our name itself. So then, if we, if you have to break it down right data, for example. So when, when you come across tariffs, you want to ensure that you're talking about how you can go from a descriptive to a predictive to a prescriptive model when it comes to tariffs and their business impact, right? By that, what I mean is just to break it down in layman terms. Descriptive is what's happening with tariffs, right? Ai, data can actually give you those insights as to what's going on when you move from descriptive to predictive. You can use data to analyze what is going to happen right in the future, right? So with tariffs kicking in, how are things going to change? Right? That is something that you can go from a descriptive to a predictive phase, and then when you go to the next level, which is prescriptive, that's where the magic happens, right? Prescriptive is the phase wherein, if what you have predicted happens, what are you going to do about it? Right? What are the actions that you're going to take about it, right? So these are the three phases that we have in our mind as we view tariffs as a business problem, and then how does that manifest as a solution? Right? So you want to have the you want to have a better grip on demand, on supply, on pricing, and you want to have, like, competitive rates and stuff bearing in mind that demand, that supply and the pricing, right? So that is what it will enable equipment, equipment financers to achieve by using data. So that's the first part of the three areas that I wanted to cover, right data. AI, I mean, obviously with tariffs kicking in. I mean, more people will want financing, but it will be harder to get right. Yeah, yeah. So, so that's where AI comes in. You want to do credit scoring, you want to kind of mitigate your risk. You want to monitor your portfolio, right? You want to de risk your portfolio. So that's where AI can play a very active role, and you can ensure that those who are deserving, those who have the credit worthiness, do get approved, right in spite of the tariffs at at higher prices, and the credit scoring and the credit decisioning becomes much, much better, yeah, so that's the second perspective I have on the AI pillar. Out of the three pillars that I spoke about, right? We first covered data. Second, we spoke about AI. And the third thing, from our standpoint and our vantage point, is CRM, right. So by that, what I mean is customer relationship management. Think about software like Salesforce. Think about software like dynamics, right? So, if you are a broker, if you are a lender, if you are a lessor, if you are a captive, if you are a non captive, right? If you are an OEM, all of the businesses, right? They have their single source of truth, which is their customer relationship management. So in the age of tariffs, or when we are talking about tariffs and the impact to the equipment finance industry, we want to ensure that you are personalizing for your end customers, right. So the personalization can only happen if you have solid customer relationship management, right? So I'll give you an example. So if you are a manufacturer in the age of higher tariffs, right, you might offer like a 0% interest deal. You might offer like a longer payment plan, right? So if you want to compete with manufacturers, with OEMs, right? If you're a finance company, if you're a non bank, or a non captive or a bank, how do you compete with your with the OEMs who are offering these kind of deals when the tariffs increase? So in that case, right? You can have personalized finance deals chopped out using the power of your CRM, if you know your customer, your end customer, well, if you know your end customer better, right? You can use that for personalized finance, and that's what CRM can help you achieve, right, right? Quinn, right. So that's our vantage point. Hopefully that was helpful. I tried to break it down into simple terms, and I tried to break technology and AI down into three areas, right, our perspective on data, our perspective on AI and our perspective on CRM and how they come together, right, to ensure that you can have like competitive rates offered. You can have personalized finance offered, and you can compete. You can do better credit scoring. In credit risking, and you can run your business better, yeah,
no, that's super interesting. And I haven't even thought about the point of how, you know, as these tariffs kind of create these challenges, how, how? Yeah, using AI to make effective credit decisions, right? How that could become, you know, increasingly important. And one thing I was wondering, as far as the as far as like data collection to train the AI on, I'm wondering if there are any kind of previous global events that we can maybe turn to as examples, right, like, for instance, like the pandemic, right? Like the we did, obviously different, but some of those challenges that we saw there, as far as you know, supply chain disruptions, those are some, some like possible outcomes with the tariffs and stuff as well. So wondering if, you know, we if there's any opportunity there to use data from previous global events to help equipment finance navigate some of these challenges.
Great question. Quinn, and I mean, you got it spot on, right? We experienced supply chain issues. We experienced issues towards operational efficiency at the backdrop of COVID, which is relatively recent event, five to four years ago, right? So we have seen that. So, I mean, we might experience that right with with our country negotiating with other countries in terms of the reciprocal tariffs and stuff. I mean, a lot of decisions are going to be made. Manufacturers might shift countries, and they might set up factories elsewhere, hopefully here in the US. So we might experience based on the demand, right, based on certain types of equipment which is in high demand, to your point. And just like you mentioned, I think we are most likely to experience supply chain issues, disruption, operational efficiencies and stuff. So I think that's exactly where AI can can come in, and you can kind of optimize your inventory, right? So at data cream, for example, we get into discussions where you're talking about trunk stock in terms of mid devices, inventory management and stuff like that. So you want to ensure that high ticket items or items which a lot of businesses need, which are in high demand, are easier. I mean, you're not. They're not spending time sitting in, sitting on the shelf somewhere, right? Likewise. I mean, if you can, if you can understand that, hey, I mean, there's going to be this disruption, or the manufacturers is going to make some strategic decisions. I mean, that's where you can use AI and ensure that, basically, the operational efficiency is their supply chain issues are mitigated. So absolutely. I mean, I think we can look at those prior events like COVID, we can look at those macro scenarios, right to ensure that they are not entering into the same territory and they're not getting impacted by those same kind of issues due to tariffs. So, yeah, absolutely, I think it, I think it definitely can help, absolutely,
yeah, and I mean even tariffs too, right? Because, I mean Trump, he imposed tariffs during his first term as well. Obviously, maybe not to this, this degree, but, but, you know, I think there's some, some precedent there. And one thing I'm wondering, if, for maybe those, those lenders out there who maybe they just, they're new to AI, they haven't used it very much. And, you know, I think about some of those relatively simple AI tools out there, like, large language models, right? I'm wo...

With the rise of AI and automation in the equipment finance sector, lenders must shift to a digitally-focused infrastructure. 

Using technologies like AI to streamline processes, enhance transparency and improve customer service can help equipment financiers develop better solutions, Jeffry Elliott, founder and chief executive of Elevex Capital, tells Equipment Finance News on this episode of “The Dig” podcast.  

“We're trying to implement the latest and greatest technologies to create a more fast, flexible and transparent process, enable transactions to happen digitally, and utilize artificial intelligence to work with our customers,” he says. 

“We also pick up the phone and talk to people and go visit people, just old school way, but we're utilizing technology where customers want to utilize it, and making the process better, taking friction out of the equipment finance process.” 

Bank originations decreased more than 30% in January, while independent originations rose 9%, according to the Equipment Leasing and Finance Association’s CapEx Finance Index, released Feb. 26. The volatility in the equipment finance market between banks and independents creates an opportunity for independent lenders to take advantage, Elliott says. 

Technology helps equipment financiers obtain asset management information, such as transaction details and financial statements, faster and better organize the data, Elliott says.  

“You only have so much time in the day to do everything, so bringing those technology assets to bear and the big transactions are going to make them faster and more flexible and a better experience for the customer and meet their deadlines,” he says. “It also helps us in terms of risk on concentration risk.” 

Tune in to the newest episode of “The Dig” to hear from Elliott about implementing AI, balancing speed and efficiency, managing complex transactions with technology and advice for what he says may be a “choppy” environment ahead for equipment finance industry. 

Early Bird pricing for the third annual Equipment Finance Connect ends March 28. Taking place at the JW Marriott Nashville on May 14-15, 2025, this is the only event for both equipment dealers and finance providers. Learn more and register here.  

Johnnie Martinez   0:06
 All right. On today's episode of the Dig, I am joined by Ivan Franklin of Mitsubishi HC Capital America and I will let him introduce himself further.

 Ivan Franklin   0:15
 Yeah. So obviously, I'm, I'm Ivan Franklin.
 As Johnny just mentioned, I'm the the VP of Business Development focusing on new OEM finance partnerships for Mitsubishi HC Capital America.
 I've been with the company now and it's kind of crazy to think, but it'll be 12 years coming up in September. That's been through a couple different iterations.
 We work Creek grids and we're about by Hitachi.
 Got you.
 Then we're about by Mitsubishi, so there's been changes too, but I've been. I've been here for all of those.
 So it's been a great experience know I currently report to our Itasca IL Office, but I I work out of my home here in Stillwater, MN.
 So you got me on a good day because the sun's been shining the last couple days, which we haven't seen in about 3.
 So energy levels are high, but yeah, that's that's my my, my background for my, for myself, I've probably been in.
 Construction financing now for seven to eight years.
 I didn't start there in equipment finance, but that's where I've been. And you know, I've learned a lot.
 I think it's a great industry and I'm excited to continue my career and and growth within this industry as well.
Johnnie Martinez   1:16
 OK.
Ivan Franklin   1:21
 And you know, no. Go ahead, Johnny. Sorry.
Johnnie Martinez   1:27
 You rob the construction industry specifically and that's kind of going to be our focus here today. And you know one of the reports that the Mitsubishi HC Capital America put out.
Ivan Franklin   1:33
 Yeah.
Johnnie Martinez   1:38
 Back in January was some of the trends to identify, but I wanted to get your take on it. As someone who's a lot more in in the trenches, in terms of what the?
 You know, construction industry should be expecting for the rest of this year and sort of what are those key trends to to watch.
Ivan Franklin   1:58
 Yeah. You know, there's a a handful of trends that that we're kind of seeing out there.
 I think the first one we saw on the latter part of 2024 and it's going to, I think continue to creep into 2025 and that's just a little, you know, economic uncertainty and some slowness in the market. You know inflation still here I think.
 From an anecdotal standpoint, we're still seeing some equipment purchases drag on or some finance quotas that out there longer than normal, right?
 So I'm hoping that's not going to be the case.
 25 But that's kind of what we've seen.
 And my next point.
 I'm proud of myself.
 It took me all but a minute and a half to shamelessly plug some financing, but I think there's going to be a continued shift towards flexible finance offerings.
 We're already seeing it now and I think we'll continue to see it, but an increase in in appetite for FMB leases and operating leases since they provide the most flexibility and typically have the, the lowest monthly payment and then maybe some structured finance.
 Solutions and when I say that I mean things with skipped payments or seasonal payment streams on on loans and leases, things that match the cash flow cycle of businesses, we'll see too.
 Other things are growth in the rental industry.
 I think we probably say that year after year, but it's going to be the the case this year as well.
 It's a continually growing market and again for some of the same reasons, right.
 I think it's more flexible for customers and also can be cost effective since you're paying for the use of the equipment.
 Ment electrification is going to be a big one. You know all the OEMs out there have some form of electric piece of equipment that there's, you know, big marketing push behind. And then lastly just increased adoption of technology.
 So things like AI telematics and automation.
Johnnie Martinez   3:49
 That that makes a ton of sense.
 And yeah, it's a lot of the the same themes behind all the the trends, right.
 It's about meeting these these user needs these customer demands and getting exactly what they kind of need depending on where their business is going.
 All right.
Ivan Franklin   4:05
 Exactly.
Johnnie Martinez   

Johnnie Martinez
0 minutes 5 seconds0:05

Johnnie Martinez 0 minutes 5 seconds

On today's episode of the Dig, I am joined by three members of the altar group and I will let the three of them introduce themselves.

Johnnie Martinez 0 minutes 14 seconds

Well, if you'd start us.

VG

Valerie L. Gerard
0 minutes 15 seconds0:15

Valerie L. Gerard 0 minutes 15 seconds

Sure. Thanks, Johnnie.

Valerie L. Gerard 0 minutes 16 seconds

I'm Valerie Gerard Co, CEO of the Ulta Group and I lead the largest practice within Ulta that's focused on providing general consulting and advisory services. And you know it might make sense for me just to spend a second to introduce the Alta group, to your listeners who aren.

Valerie L. Gerard 0 minutes 32 seconds

Familiar with us, we have been around for 30 years.

Valerie L. Gerard 0 minutes 37 seconds

We are the undisputed leader when it comes to providing advisory services.

Valerie L. Gerard 0 minutes 42 seconds

On a global basis to the equipment leasing and finance.

Valerie L. Gerard 0 minutes 45 seconds

Industry, we are exclusively focused on equipment finance and leasing.

Valerie L. Gerard 0 minutes 50 seconds

We're not distracted by mortgages or consumer autos. It's just the core equipment leasing business and anything that a client would have in terms of a need, we do it.

Valerie L. Gerard 1 minute 3 seconds

So that could be assisting them with some growth initiatives, entering new markets, becoming more efficient in what they do.

Valerie L. Gerard 1 minute 11 seconds

We have a lot of competitive intelligence, market intelligence work we.

Jim Jackson 21 minutes 28 seconds

So I would imagine that's that's going to be another leg in the stool that people will consider as we go forward.

Jim Jackson 21 minutes 34 seconds

It's just still a bit at the infancy stage right now, so it's it's it's a consideration, but I wouldn't say it's a major factor just yet.

Johnnie Martinez
21 minutes 46 seconds21:46

Johnnie Martinez 21 minutes 46 seconds

Hey, understood. And as we we sort of get into the end of this, I know this report is so comprehensive and touches on so many different things that we could discuss. But I want to be valuable with with your time and obviously the listeners time if we could.

Johnnie Martinez 22 minutes

Go through and kind of some some key takeaways, distillation, maybe one or two from each of you of things that you know sections in the report.

Johnnie Martinez 22 minutes 8 seconds

Key things that you learn while putting it together that the reader should be aware of and you know they can.

Johnnie Martinez 22 minutes 13 seconds

They can go in and look at the the report themselves.

Johnnie Martinez 22 minutes 15 seconds

Of them trying to get the the more macro view of it.

Johnnie Martinez 22 minutes 21 seconds

Wait a few would start.

RR

Rick Remiker
22 minutes 24 seconds22:24

Rick Remiker 22 minutes 24 seconds

Well, I would start with, you know, watch for the continued reemergence of Banks re entering the space. More than likely with a little more pricing discipline and probably a little more measured balance sheet growth focused predominantly on customers.

Rick Remiker 22 minutes 43 seconds

So I don't think that it's an end to the glory days of of independence and captives, but I think you'll see 2025.

Rick Remiker 22 minutes 51 seconds

The banks will come back, particularly the regional banks will come back.

Rick Remiker 22 minutes 54 seconds

Back in a much stronger fashion.

JJ

Jim Jackson
22 minutes 59 seconds22:59

Jim Jackson 22 minutes 59 seconds

Yeah, Johnny, I'd say from my standpoint on the M and a market, you know we're expecting a strong M and a market.

Jim Jackson 23 minutes 5 seconds

I think there's a lot of things in our favor.

Jim Jackson 23 minutes 7 seconds

The caution again is keep an eye on the interest rates.

Jim Jackson 23 minutes 11 seconds

Let's see what the Fed does.

Jim Jackson 23 minutes 12 seconds

Let's hope we can continue on our course to have a soft landing and the interest rates behave so that we can continue to see some progress in the M and a front in 25.

VG

Valerie L. Gerard
23 minutes 25 seconds23:25

Valerie L. Gerard 23 minutes 25 seconds

And I would just throw in one cautionary note.

Valerie L. Gerard 23 minutes 28 seconds

You know the industry has benefited from some very strong credit quality over the last handful of years and I think it's just time now where we're starting to see potentially some stress on portfolio.

Valerie L. Gerard 23 minutes 40 seconds

So keep a watchful eye.

Valerie L. Gerard 23 minutes 42 seconds

We're not concerned that there's going to be any big credit crunch or crisis out there, but just start to just start to pay a little more attention on the credit book.

Johnnie Martinez
23 minutes 53 seconds23:53

Johnnie Martinez 23 minutes 53 seconds

Caviano that that all makes a bunch of sense.

Johnnie Martinez 23 minutes 55 seconds

And you have so much of it is, you know, you can do the due diligence on the front end.

Johnnie Martinez 23 minutes 58 seconds

It's less problems on the back end.

RR

Rick Remiker
24 minutes 1 second24:01

Rick Remiker 24 minutes 1 second

Absolutely.

VG

Valerie L. Gerard
24 minutes 1 second24:01

Valerie L. Gerard 24 minutes 1 second

There you go.

Johnnie Martinez
24 minutes 3 seconds24:03

Johnnie Martinez 24 minutes 3 seconds

Alright. Well, with that all in mind, I would just say if is there anything else that our listeners should know about the report or the Alta group and then obviously they can read the the reporting itself and but anything else in particular that stands out that we should.

Johnnie Martinez 24 minutes 18 seconds

Discuss at this moment.

RR

Rick Remiker
24 minutes 22 seconds24:22

Rick Remiker 24 minutes 22 seconds

Again, go to thealtagroup.com and pull down the 2025 Alta Group Insights report.

Rick Remiker 24 minutes 26 seconds

I think it'll be a excellent 5-10 minute read.

Johnnie Martinez
24 minutes 32 seconds24:32

Johnnie Martinez 24 minutes 32 seconds

Alright, well, I thank all three of you for Jim.

Johnnie Martinez 24 minutes 35 seconds

Are you gonna add something? Sorry.

JJ

Jim Jackson
24 minutes 37 seconds24:37

Jim Jackson 24 minutes 37 seconds

No, I was just going to also say and once once you go to the website and pull down the report and read it, obviously if you have questions about the report, you know, I'd encourage everyone. Our contact information is out on the website.

Johnnie Martinez
24 minutes 40 seconds24:40

Johnnie Martinez 24 minutes 40 seconds

Hmm.

JJ

Jim Jackson
24 minutes 47 seconds24:47

Jim Jackson 24 minutes 47 seconds

Feel free to call Valerie or Rick or myself.

Jim Jackson 24 minutes 50 seconds

We'll be happy to explain anything that maybe isn't quite clear or expand on any of the discussi...

Johnnie Martinez   0:04
 On today's episode of the Dig, I am joined by Declan North of Tarrick Financial Services and I will let him introduce himself and go deeper into his background.

 North, Declan   0:13
 Johnny, thanks very much.
 Obviously Declan North and Global Director of Trade and financial Services for tariffs financial services, looking after the Materials processing Division materials processing is one of the two segments or one of the three segments of the Terex Corp, which is quite a diverse segment.
 I have been with financial services.
 Now I'm heading into the 10th year, so only feels like yesterday when I joined.
 I'm an Irishman from the accent, I'm sure you can detect, but based in the UK and I covered a globe from my little office here in Chinar in Oxford.
 So delighted to be on and look forward to this podcast.
Johnnie Martinez   1:03
 Fantastic. Well, it's great to have you.
 I'm glad we were able to get connected and.
 You know, I think it's important to talk about everything you guys are doing, especially, you know you look at it from a a global scale, this industry is changing so much all the time.
 You know the individual lending segments and then the wider lending space from where you sit in the role you have, you know what makes kind of your job at Terex Financial Services unique and what makes the the division you cover so so unique in the space?
North, Declan   1:34
 Oh, that's that's that's really the $6 million question.
 I'll tell you why I love the job I it is the uniqueness of it.
 So Terrib financial services, we are the captive arm, but we don't operate on books.
 So we operate with a number of funding partners.
 What makes my role really unique is that when I say it's a global role, most people show that global role into their title.
 But this is truly a global role. So.
 Material processing cell or have dealers or provide facilities?
 I have an involvement in it and that's from the start right through to the finish. So it's a really integrated job. I get to see different cultures.
 So last year I was in Australia, I was in India, I was in Dubai.
 You don't know where you're going to find yourself, which means that you're not just restricted.
 To one area or one segment or one territory.
 You've gotta get a broader understanding of the different cultural and we may talk the same language, but there's different variances and cultural differences as you go from country to country, region to region.
 So you know, that's what makes it quite unique.
 What makes Turks material processing unique is we're made-up of about 2627 different business units, each one of them has a different requirement.
 It's quite a diverse portfolio of businesses and that's what makes it really interesting.
 So you get to see.
 You know.
 Concrete mixer truck. You get to see a volumetric mixer truck. You get to see a shredder, you get to see Crane, you get to see material handler. You get to see a crusher or a power screen or Finley crushing screen.
 And so it's really quite diverse.
 Eve equip screeners no two days are the same and no, no. Same.
 No two hours are the same, let alone 2 days of the same.
 So that's what makes it really exciting.
 And we work with a great crew.
 You know, our guys are really, really professional.
 They're they're long term employees that have a really passionate feel about the business and I suppose we're the same, whether it's the financial services, whether it's the equipment side, you really are ingrained in the business and kind of passionate about it.
Johnnie Martinez   4:07
 That's you OK11 other question. I was gonna wanna ask, and I was gonna have this at the end, but I'll. I'll go ahead and do it here because of what you're just talking about.
 You know, I've had the luxury of talking with a lot of people who operate in this industry, especially at the the United States domestic level.
 Or, you know, they'll do some international stuff with Canada or Mexico with you operating on this global level, right?
 What advice would you give to someone who's kind of stepping into that?
 Level of equipment finance and starting to operate in that world as far as you know a global.
 Level of transactions and interacting with people all around the world versus maybe just Aus or just auk. Just a domestic transactions.
North, Declan   4:47
 Yeah, yeah, that's a great question.
 And it's quite funny. So to kind of give you a little bit of history, I I moved to the UK 14 years ago.
 So up until then.
 All my working life had been in Ireland.
 Expect that you move to the UK.
 That would be fairly similar to Arlington.
 The similarity was kind of the language.
 You know the products were slightly different.
 The the actual.
 Way people transacted was totally different. So it was the first kind of eye opener. And then as I moved to the UK and I started having a kind of more of an international role, the advice I would give is embrace the local culture and get to know that.
 Local culture before.
 Trying to predetermine what you want to offer, because once again, you know, they may have the same.
 Products, but the delivery of those products or the the local way of dealing is is different, you know Middle East is totally different to India, which is totally different to China, which is totally different states, which is totally different to Europe, you know and that that was one.
 Of the things I think over the last 14 years.
 That is really struck home with me is.
 Understand who you're dealing with and understand the culture, because I think that's that's the first step to actually making it a success, because if you get to know that person or get to know their culture and accept and embrace, it makes a big difference.
 A simple little thing.
 Irish people tend to talk very fast.
 Slow down, you know.
 I mean, I know you're there. You go that you know, if you had to set that to be 14 years ago.
Johnnie Martinez   6:31
 That.
North, Declan   6:35
 Yeah. No, I don't know what you're talking about.
 But yeah, you know it's that would be my my best advice.
 Look at the target market.
 Look at the culture.
 Understand the culture.
 I'll tell you a funny story, but I went and started doing business in India. First I sat in the meeting and the Indian people are fantastic.
 People are absolutely lovely people, but they don't like to say no and you know, I came away thinking, wow, that was really good and really, you know.
 Really easy and when I got back to the UKI started sending my follow up emails, you know, kind of this what we're going to go. Oh, no, we can't really do that.
 And I was kind of going, you should have told me that when I was down there, but my local guys were kind of gone.
 They didn't want to offend you and then kind of go well. You know, I'm usually. I'm not usually offended so.
 Prefer to talk direct, but that was an eye opener for me.
 You know, 'cause, I came away thinking I had agreed something, but I agreed nothing and I had to go back and start all over again, you know.
 So that was that was a really big learning experience, but I've enjoy...

Welcome to The Dig, where equipment finance news editors connect with industry leaders and dealers to discuss news analysis, market trends, tips, and more. I am Johnnie Martinez II, Senior Associate Editor of Equipment Finance News, the one news source for both dealers and lenders. 

Today we're joined by Fleet Advantage's Brian Holland, and I'll let him introduce himself. Hey, good afternoon, I'm Brian Holland, CEO of Fleet Advantage, delighted to be here. Delighted to have you, and I want to start off, for people who maybe aren't as familiar with you guys, who is Fleet Advantage, and what role do you guys play in the equipment industry, specifically the transportation industry? So Fleet Advantage is the largest independent lessor for heavy-duty Class A trucks in the country. We're also the leading innovator for specialty financing, fleet data analytics, fleet management services, and life cycle cost management. We serve more than 50 of America's top corporate transportation fleets, and Johnnie, while we're technically a specialty finance business, we're better described as a business intelligence or an asset management firm. We use data analytics, deep industry expertise, and flexible financing solutions to help our clients make better decisions about their fleet, to improve productivity, to reduce their environmental footprint, and save millions and sometimes tens of millions in operating costs. So our innovative life cycle management program also helps fleets to meet their ESG objectives while effectively managing their transportation assets. Right now, we're helping our clients plan for the future and deal with the rapidly changing landscape. To your point, the current state of the market has been in such a flux, the rapidly changing landscape, as you said, and some of that is also the role that you guys have just had to play has changed, and the role that lenders have had to play has changed, but with that in mind, how do you evaluate the current state of the transportation and fleet finance market? You know, despite all the economic challenges that are facing the transportation sector today, it's a fascinating time in the industry. All of the experts are predicting the largest truck pre-buy ever in 2025 and 2026, due to the EPA's 2027 NOx rule, the California Air Resource Board mandates, and the allocation, which is driving a shift to zero emissions trucks. And other states have been following suit. So, we all know that it's a cyclical market, but now more so than ever. We came out of COVID and post-COVID with a lot of equipment on allocation. Demand was high, production was limited, and there were lots of supply chain disruptions. Now, fast forward to today, it's a buyer's market, but that's going to change quickly, and then we'll be right back into a period of allocation and rising prices. So, this really emphasizes the need for flexibility and agility to be able to respond to changing market conditions, and we're advising our clients to have a long-term strategy to navigate the next few years. You talked about a few things there that sort of went to how you guys have been able to be successful in this more challenging environment. The flexibility, the talking strategy with your clients, is there anything else that really stands out to you in terms of how Fleet Advantage has been able to have a strong 2024? Well, I would tell you that there are opportunities in every market. We listen to what our clients are telling us and the challenges that they're facing, and then we look for innovative ways to help address those challenges. We introduced a number of new products during this past year. We introduced new analytical navigator tools for intelligent decision-making to help clients identify the appropriate equipment to help continue to reduce emissions, which in many cases remains focused on adopting newer clean diesel technology. We also partnered with FleetNet America and Cox Automotive to provide organizations with transportation fleets, specialty financing with reliable access to a nationwide maintenance solution, and we also introduced our EVPath program to help support companies with transportation fleets that are transitioning to EV and alternative fuel trucks. So under this program, we matched the monthly payment on the lease of an electric truck to that of a diesel truck, which represents a more digestible investment for the fleet. This could represent savings to the fleet of up to $3,000 per truck per month, in addition to offloading the bulk of the equipment's residual risk. So education is also a big part of our mission, and we've recently held a series of webinars to help fleets navigate the allocation and emissions mandates. And all of these innovations have really helped our clients, but they've also helped us to surpass, you know, $1.1 billion in syndicated lease volume over the past 12 months. Well, that's amazing. And you talked about it quite a bit there. You know, obviously there's a little financial success about it, but the education side of it and the approach to sort of EVs with the webinars and with the EVPath program, and when you think about all that and putting it together, you know, there's a lot of conversation as to what the future is going to look like as far as EVs go, both in terms of what has been happening, what has come out of the election. We don't know necessarily what it's going to look like. From where you guys sit, and as you start looking into next year, how are you approaching it, and how do you think the industry should continue to approach it? Well, that's a great question. You know, with the change in the administration, you know, there's been talk about, you know, what role does, you know, the EV mandate play going forward? You know, our discussions with all of the OEMs, you tell us that, you know, the market is still going in the same direction. You know, all the OEMs have made substantial investments in infrastructure and in new technology, you know, which they want to bring to market. Now, you know, that may change a bit with the new administration, but we expect that things will continue on their course. So, we're continuing to advise our clients to take a practical and measured approach, you know, to the shift towards alternative fuel vehicles. And it's really important to understand where these newer technologies sit within those organizations, but also to balance, you know, the EV adoption while recognizing the significant investment that's going to be required. So, what that means for us is helping our clients, you know, develop a multi-year procurement plan, which includes a roadmap to align with the OEM offerings and also market trends, and then scrutinizing operating and performance data to optimize the procurement and the viability of those alternative fuel vehicles. So, a really interesting time in the market. Gotcha. And you talked about it some there in terms of how you guys are working with your customers in all of this and make sure they're in the best setup. Are there any other challenges that maybe we haven't talked about that you're hearing from them as far as, you know, EV adoption or even into the wider transportation space, talk about things like clean diesel and things of that nature? Well, that can be a pretty long list. Fair enough. But certainly at the top of the list is the need for flexible and competitive financing options to help produce truck and finance costs. So, preparing for the car pre-buy is also top of mind for fleets. You know, they want to know how to go about acquiring alternative fuel equipment. They want to know how to balance their operational effectiveness with their financial flexibility. Also, you know, how do they manage fuel and maintenance costs, you know, while progressing towards a carbon-free future? One of the things you brought up there that I think is worth talking about, especially as we get into 2025, the flexible fin...

There are two keys to success in the equipment finance industry in a high interest rate environment: adequate vetting and balanced partnerships. 

Partnerships in the industry are the best means for companies to meet their goals and objectives, but aligning the partners' goals equally remains key, Brian Rosa, president of commercial finance at Mitsubishi HC Capital America, tells Equipment Finance News in this episode of “The Dig” podcast. 

Brian Rosa became president of commercial finance following the April 1, 2023 merger of Mitsubishi HC Capital America, ENGS Commercial Finance and Mitsubishi HC Capital (USA), operating under the name Mitsubishi HC Capital America, and over the past seventeen months, Mitsubishi HC Capital America announced several new partnerships. 

Mitsubishi HC Capital America recently partnered with the PulPac and the Seismic Group to finance sustainability equipment and technology, according to a Sept. 10 release. 

“Generally, both companies’ goals and objectives need to be aligned, and it's also important that the benefits derived from the partnership are equitable for each party,” he says. “I don't think I've seen too many partnerships where one party is getting considerably more benefit than the other. Those partnerships typically just don't work out in the long term, so we want to make sure we're aligned and we're each getting equal benefits.” 

Another key component of equipment finance partnerships is developing partnerships that can exist across both strong and weak business cycles, Rosa says. 

“The higher interest rates coupled with inflation have created challenges for many companies, and it's led to some volatility in certain sectors, so when we partner with someone, we want to know we'll be able to count on them just as they would expect to count on us through the ups and downs.” 

Tune in to the newest episode of “The Dig” to hear from Rosa about equipment finance partnerships, market outlook and market opportunities.