Private credit pressures equipment lenders to balance growth, risk

Private credit is gaining momentum across equipment finance as banks, independents and dealers compete for capital in a market in which financing demand remains strong, but risk discipline is tightening. 

Banks have reentered the equipment finance market after pulling back during the pandemic, rising interest rates in 2022 and the 2023 Silicon Valley Bank collapse, Bob Rinaldi, president and founder of Rinaldi Advisory Services, said May 18 at Equipment Finance Connect in Houston. 

At the same time, private credit providers are moving further into equipment finance, creating new competition for banks and traditional lenders, Rinaldi said. 

“Everybody seems to have shaken off the dust and they’re coming up out of the foxholes and looking to find a place to put cash,” he said. 

Private credit raises competitive pressure 

Meanwhile, banks appear focused on asset growth, while private credit competition might influence their willingness to compete, Rinaldi said. 

“They seem to be really worried about [private credit],” he said. “They are maybe being a little more aggressive so some of their customers don’t go outside for private credit.” 

Still, capital availability remains strong, Rinaldi said. 

“At the same time, the ABS market for securitization of equipment asset-backed securities has been absolutely red-hot,” he said. “There’s just not enough of it to go around.” 

Dealers watch inventory, capacity 

While lenders seek to balance growth with credit discipline, dealers are paying closer attention to credit capacity, inventory mix and aging equipment, especially as tariff-affected equipment sits on lots and floorplan costs remain elevated, Skip Owen, director of sales at Hills Machinery, said during the panel discussion. 

“We just have to work together to manage the inventory well to make sure we don’t get stuck in the end,” he said.

At the same time, equipment and vendor financier DLL is watching dealer affordability closely, Heidi Brooks, U.S. sales manager for commercial finance at DLL, said during the discussion.  

She said the lender is evaluating whether dealers can afford their credit capacity, interest payments, principal payments and rental fleet equity obligations. 

“Just because you want $25 million in inventory doesn’t mean that you can afford $25 million in inventory.” — Heidi Brooks, U.S. sales manager for commercial finance at DLL 

Lenders balance access, discipline 

The competitive dynamic leaves lenders balancing growth with discipline, Kirk Mann, executive vice president and general manager of transportation finance at Mitsubishi HC Capital America, said during a May 19 fireside chat at the Houston event.  

“We want to create a good situation for our customers and make it easy on their liquidity and on their cash flow, but we also have to maintain that discipline,” he said. “So, there’s a balance.” 

Mitsubishi HC Capital America estimated the global private credit market at $3 trillion and projected it could reach $5 trillion by 2029, according to a Dec. 9 release. 

Read more about Equipment Finance Connect 2026 at equipmentfinancenews.com.