PALM DESERT, Calif. — Equipment lenders and their private capital partners are increasingly pooling assets in shared securitizations and expanding funding options while allowing originators to retain servicing relationships.
Hugo Morrissey, director in Bank of America’s ABS banking and finance group, has seen three or four transactions using multiple contributors over the past year, he said during a panel discussion on Oct. 27 at the ELFA’s annual convention.
Under the arrangements, an originator sells a portion of its loans or leases to a funding partner through a forward-flow agreement, he said. Both parties then contribute to a subsequent asset-backed securities transaction.
The structure can help originators increase securitization volume, earn servicing and origination fees and potentially secure better funding terms, Morrissey said.
One example is Post Road Equipment Finance’s 2026-1 transaction, which included a third-party buyer contributing 18.4% of the pool’s securitization value through a forward-flow arrangement, according to an April 2 KBRA report.
Post Road continued servicing the loans and leases after selling them to the partner, according to the report.
Private investors are increasingly pursuing portfolio purchases, forward-flow agreements and joint ventures with equipment finance platforms, Angela Ulum, a partner at law firm Mayer Brown, said during the panel.
“You have somebody who has money to invest and who doesn’t really want the relationship,” she said. “They want the assets.”
Access to that funding also requires reliable documentation and servicing, said Quentin Cote, managing director, commercial at loan servicer Concord.
He described one bank’s attempted portfolio sale that fell through because it lacked definitive copies of the underlying contracts.
Diversifying capital
Separately, Lake Oswego, Ore.-based equipment lender Dext Capital has expanded from private equity funding into bank financing and securitization, Chief Financial Officer Conrad Nilsen said during the conference.
Dext has completed six securitizations and originates a little more than $1 billion annually, he said.
The company continues exploring additional funding sources to protect vendor relationships if an existing capital channel becomes unavailable or more expensive.
“One of the most valuable things that an equipment finance platform can offer to its customers or vendor partners across the board is stability,” Nilsen said.
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