Dealers, lenders emphasize flexibility amid economic hardship

From subsidized rates to skip payments, equipment dealers and lenders are adjusting their operations to persevere through economic challenges.  

High interest rates and rising new equipment prices, for example, are prompting dealers to put more emphasis on “creative financing,” Josh Arnall, finance and insurance manager at Hopkinsville, Ky.-based H&R Agri-Power, said in a panel discussion this week at Equipment Finance Connect 2025 in Nashville, Tenn.  

“If a piece of iron costs a half million dollars, $1 million today, then what we’re selling as much as anything is a financial solution for that customer,” he said. “Everything we’ve done in 2025, all the equipment that we’ve moved, has required some sort of subsidy, either from the manufacturer — 0% financing for Kubota, interest waivers with CNH Capital — or even H&R Agri Power taking some risk or subsidizing a rate or a term.” 

Nearly 35% of agriculture equipment dealers expect new machine prices to increase in the second quarter, and nearly 45% expect prices to remain the same, according to an April 17 report by heavy-equipment research firm IronAdvisor Insights.  

Dealers also must adapt to changing consumer behaviors driven by uncertainty of tariffs, Justin Jones, corporate sales manager at Nashville, Tenn.-based Diamond Equipment, said during the event. If certain customers are unwilling to purchase new equipment, dealers can still generate revenue by capitalizing on strong rental demand and focusing more on aftermarket products and service, he said. 

“It’s just basically a movement of where our money is going to come in as a dealership,” he said.  

Navigating surcharges 

Dealers and lenders are gearing up for surcharges on equipment resulting from tariffs. Lenders should focus on diversifying their portfolios as surcharges affect some heavy-equipment sectors more than others, Stephen Anderson, director of originations at Chicago-based BMO Commercial Bank, said during the event.  

“Some of the successful ones are looking at it and saying, ‘OK, the surcharge is this,’” he said. “That means the percentage of that customer base is going to go down because of that. So, they’re out diversifying. … Maybe they’re financing sprinter vans. Maybe they’re financing Amazon trucks.” 

Offering longer loan terms, from 72 to 84 months, and allowing more skip payments also mitigate risks for lenders, Anderson said.  

Dealers, meanwhile, have a window of opportunity to sell incentivized equipment before they get hit with surcharges, Diamond Equipment’s Jones said. 

“We’ve got equipment that’s more valuable because it’s not getting surcharges, and we’ve still got 0% financing on a lot of our equipment,” he said. “So really, on the dealership side, it’s incumbent on us to capitalize.” 

Keep up with all the news from the Equipment Finance Connect here.