From credit facilities to usage-based models, equipment lenders are offering unconventional financing structures to capitalize on the equipment rental boom.
Rental penetration for construction and industrial equipment reached a record 59.5% in 2025, according to the American Rental Association, which projects the U.S. rental market to grow 3.6% in 2026 to a record $83.5 billion.
Lenders looking to break into the growing rental industry must understand the cash-intensive and seasonal nature of the business as demand fluctuates for certain machines, Josh Nickell, chief executive of Atlanta-based Northside Tool Rental, said during a panel discussion at Equipment Finance Connect last week in Houston.
“I don’t necessarily want to order 20 [machines] at a time, because I can be more efficient if I order a couple at a time,” he said.
Revolving credit
Thus, rental houses are seeking partners that provide flexible fleet financing so that ordering a few machines doesn’t require a new agreement each time, Nickell said.
A revolving line of credit is one effective structure for rental fleet financing, Ritzon Fernandez, senior vice president of sales at Equify Financial, said during the discussion.
Equify’s revolver product is popular among rental companies because “there’s flexibility in terms of drawing against it or repaying against it,” he said.
“When we’re talking to customers or rental houses, that product is pretty powerful because of the structure, and we can charge a strong premium for that product,” Fernandez said.
Northside Tool’s Nickell said many rental companies are willing to pay a premium for flexibility because it allows them to focus on their strengths as asset managers.
Usage-based models, skip payments
Usage-based models also enable rental providers to quickly respond to demand changes without straining cash flow, Heidi Brooks, U.S. sales manager for commercial finance at DLL, said during the discussion.
With DLL’s pay-per-use program, “dealers can put together a contract where you’re paying for the hour, a time frame or something like that,” she said.
Usage-based models and shorter floorplan terms allow lenders and rental providers to maximize revenue from an asset while it’s at peak value, Brooks said.
“The forefront of the value of the asset is really what we’re thinking of in conjunction with how our dealers are generating revenue for this stream,” she said.
Skip payments also align with the industry’s seasonal nature, Brooks said.
Equify’s Fernandez agreed, saying that Equify’s skip-a-pay program, which permits up to two skips per year, is attractive to rental companies.
“We can really customize some things that require manual tracking on the back end, but it allows us to do some things that are a bit unique,” he said.
Read more from Equipment Finance Connect 2026 at equipmentfinancenews.com.
