Demand for flexible financing solutions is forecast to increase in the construction industry through 2025.
A growing shift is expected toward offerings such as fair market value (FMV) and operating leases in the construction industry, Ivan Franklin, vice president of business development for Mitsubishi HC Capital America, tells Equipment Finance News on this episode of “The Dig” podcast.
“We’re already seeing it now, and I think we’ll continue to see an increase in appetite for FMV leases and operating leases, since they provide the most flexibility and typically have the lowest monthly payment,” he says. “There’s also going to be some structured finance solutions, as well as skip payments or seasonal payment streams on loans and leases, things that match the cash flow cycle of businesses.”
In addition to flexible financing, the equipment industry appears set to lean on rentals to support cost effectiveness, Franklin says.
“We probably say that year after year, but it’s going to be the case this year as well,” he says. “It’s a continually growing market, and again, for some of the same reasons, as it’s more flexible for customers, and also can be cost effective since you’re paying for the use of the equipment.”
Construction technology trends
Developing technologies such as electrification and AI are also going to be trends to watch this year, Franklin says.
“Electrification is going to be a big one, and all the OEMs out there have some form of electric piece of equipment that there’s, a big marketing push behind it,” he says. “Then lastly, just increased adoption of technology, so things like AI, telematics and automation.”
Tune in to the newest episode of “The Dig” to hear from Franklin about the construction industry, including construction’s digital transformation, net-zero construction, financing opportunities, rental demand and market opportunities for 2025.
The third annual Equipment Finance Connect at the JW Marriott Nashville on May 14-15, 2025, is the only event for both equipment dealers and finance providers. Learn more and register here.
