Equipment lenders balance customized financing with funding flexibility

Equipment lenders that tailor financing to customers’ growth plans must consider how contract design affects servicing costs and access to funding. 

Understanding a business’s short- and long-term plans helps M&T Bank develop customized financing proposals, Christina Smaczniak, director of government lending and small business lending experience, told Equipment Finance News. 

Identifying the right financing solution and navigating Small Business Administration requirements are among the challenges the bank addresses with customers, she said. 

“Working with a lender that can help them navigate those requirements and ensure they’re getting access to capital timely is critical,” Smaczniak said. 

That process can help M&T evaluate expansion projects before their financial benefits appear in a borrower’s results, she said. Coordination across business lines and expertise in SBA requirements help the bank simplify the lending experience. 

Construction and manufacturing businesses received a combined $7 billion through 11,790 SBA-backed 7(a) and 504 loans in fiscal 2026, ended Sept. 30, according to a Nov. 2 agency release. The totals are not limited to equipment purchases. 

Additionally, the agency’s Manufacturers’ Access to Revolving Credit program, effective Oct. 1, 2025, added a working capital option for manufacturers and approved 59 loans totaling $54 million in fiscal 2026, according to the release. 

Customization carries costs 

For equipment lenders seeking to sell loans or finance portfolios through capital markets, contract design creates another consideration: Can a tailored financing arrangement be serviced efficiently and sold. 

Customized contracts can address borrower needs while complicating servicing and limiting an originator’s funding options, Quentin Cote, managing director, commercial at loan servicer Concord, said Oct. 27 at the Equipment Leasing and Finance Association‘s annual convention in Palm Desert, Calif. 

“If you create a financial contract that you can’t sell, then … it costs you more money,” Cote said. 

Interest expense represented 40.4% of equipment finance companies’ revenue in 2025, even as the average cost of funds declined 41 basis points year over year to 4.4%, according to ELFA’s 2026 Survey of Equipment Finance Activity, released Oct. 15. 

Data supports funding access 

Reliable reporting also helps lenders prepare for additional funding sources, Lake Oswego, Ore.-based equipment lender Dext Capital Chief Financial Officer Conrad Nilsen said during the ELFA session. 

Investors and rating agencies need information from lenders on originations and portfolio performance, including delinquency trends for groups of loans originated during the same period, he said. 

“When you’re thinking about approaching a first transaction, what’s huge is data,” Nilsen said. 

Growing lenders can struggle to prioritize that preparation while building sales relationships and servicing portfolios, he said. Developing reporting capabilities early helps companies tout their performance expectations when approaching investors. 

Rating agencies and funding partners need time to review information and assess management, Nilsen said. 

“You absolutely also need to have great relationships and partnerships with people who do this,” he said. 

Check out our exclusive industry data here.