New tech prompts adoption of subscription models

New technologies in the agricultural and transportation sectors are leading lenders and manufacturers to leverage subscription-based payment structures. 

Subscription payment structures are becoming more popular, Brian Rosa, president of commercial finance at Mitsubishi HC Capital America, told Equipment Finance News.   

“By paying a subscription fee instead of a large upfront purchase price, companies can conserve cash and put it to productive use in day-to-day operations,” he said. “This as-a-service financing frees up working capital and gives businesses the ability to better cover operational costs and invest in growth initiatives.” 

In addition to freeing up working capital, subscription models also allow for better predictability as paying on subscription also for better cash flow management through monthly payment schedules, Rosa said. 

With subscription or as-a-service models, customers, lenders and manufacturers can better align to business structures and industry activities, Rosa said. 

“Depending on the ebbs and flows of the business, that machine may be used heavily for a few months and then maybe goes offline for a little bit,” he said. “Through as-a-service models, they’re really utilizing it and paying for it only when they’re when they’re truly needing it and using it, and they can match that with the revenue streams coming in.” 

Equipment manufacturers focus on tech subscriptions 

Commercial agriculture equipment manufacturer AGCO found customers prefer subscriptions on technology like AI models and autonomy kits because it allows them to determine values and use cases on their farms, AGCO Chairman, President and Chief Executive Eric Hansotia said March 6 during the 2025 Morgan Stanley Technology, Media and Telecom Conference in San Francisco. 

“They like the subscription model because it gives them more flexibility,” he said. “What we’re going to see is these new features that have more new content, they’ll probably be more flexible pricing models.” 

Commercial truck dealer Ford Motor is seeing increased subscription activity as part of its Ford Pro, with software subscribers nearing 700,000, Ford Motor Chief Executive Jim Farley said during the Wolfe Research Auto, Auto Tech and Semiconductor Conference in February.  

“When you look at our telematics people, they’re buying more software than they bought even a year ago, so the attach rate on software is increasing, which is really exciting,” he said.  

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