Ty Schwamberger breaks down how to quickly tell the difference between customers who truly can’t pay and those who won’t — and why getting it wrong can cost you time, leverage and collateral.

In equipment finance collections, “can’t pay” and “won’t pay” can sound exactly the same.

Both customers are past due. Both have a story. Both will tell you they’re working on it. And both can sound sincere.

But anyone who’s spent time in commercial collections knows the truth: late payments are rarely just about money. They’re about priorities, pressure and decision-making inside the customer’s business.

The job isn’t to “be tough.” The job is to be accurate. Because if you treat a can’t-pay customer like a won’t-pay customer, you can wreck a relationship that might have recovered.

And if you treat a won’t-pay customer like a can’t-pay customer, you can waste weeks (or months) while the collateral gets run into the ground, moved, damaged or buried behind other creditors.

So the goal is simple: figure out what you’re dealing with as early as possible.

The Real Difference is Behavior, Not Attitude

A lot of collectors get fooled because they’re listening for tone. They’re listening for politeness, apologies, and “good intentions.”

That’s not where the answer is. The answer is in behavior.

“Can’t Pay”

This customer wants to pay, but they have a legitimate short-term constraint. In equipment finance, it usually comes down to timing.

They may be waiting on:

• Receivables to hit
• Seasonal revenue to turn into cash
• A credit line renewal
• An investor tranche
• Crop proceeds
• A large customer payment
• Internal approvals to clear

They’re juggling fires, and you’re one of them.

“Won’t Pay”

This customer can pay something, or could pay if they made it a priority. They’re choosing not to.

Sometimes it’s intentional. Sometimes it’s just how they operate. Either way, the result is the same. You get delayed because it’s convenient for them.

They’re betting that you’ll stay patient longer than you should.

Why This Matters More in Equipment Finance Than Most Industries

In a lot of commercial collections environments, you’re chasing an invoice. In equipment finance, you’re chasing a payment while managing collateral risk at the same time. That changes everything.

A past-due account in this world isn’t just “late.” It’s exposure. And the exposure grows every day because equipment can:

• Depreciate fast
• Get abused in the field
• Disappear into another state
• End up in a yard you don’t know about
• Get parked on a jobsite with no insurance
• Get tangled up in other creditor actions

So even when the customer is polite, responsive and sounds like a decent person, you still have to manage the account like a secured creditor. That’s the job.

What “Can’t Pay” Looks Like in Real Life

A true can’t-pay customer is usually stressed, and most of the time, they’re trying to keep the business alive. They may not love talking to you, but they usually aren’t trying to play games. Their mindset often sounds like:

• “We had a rough stretch, but we’re recovering.”
• “We’re close, we just need a little time.”
• “Once this cash hits, we’ll get caught up.”

The tricky part is that they often believe in their own timeline. They’re not always lying. They’re forecasting based on optimism and pressure.

That’s why “We should be good next week” is not always manipulation. Sometimes it’s just hope.

What “Won’t Pay” Looks Like in Real Life

A won’t-pay customer tends to be more tactical. They might not be angry. They might not be rude. They might even be friendly. But their internal thinking is usually something like:

• “I need the equipment to keep running. They probably won’t take it.”
• “If I stay vague, I stay in control.”
• “I’ll deal with them when I have to.”
• “Finance companies don’t want the equipment back anyway.”

Won’t-pay customers are rarely moved by empathy. They respond to structure, deadlines and consequences.

The Early Signs You’re Dealing With “Can’t Pay”

These are the accounts that are often recoverable if you handle them correctly.

1. Their story sounds like an operator, not a politician. You’re not getting a generic excuse. You’re getting a real explanation.

They say things like:

• “Our customers are net-60, and we’re floating payroll.”
• “We’re harvested, but cash won’t hit until ginning and grading are done.”
• “Our LOC renews in February, and we’re almost through underwriting.”

That level of detail matters.

2. They don’t dispute the debt. They don’t argue the contract. They don’t pretend it’s someone else’s fault.

They’ll say:

• “We’re behind.”
• “I know we need to get current.”

That accountability is a good sign.

3. They’ll try to do something now. Even if it’s not the full amount.

A can’t-pay customer will often say:

• “I can send $2,000 today and another $2,000 Friday.”
• “I can make the regular payment and start chipping away at past due.”

They may not be able to fix everything immediately, but they’re trying to reduce pressure.

4. They’re willing to back up the story. Commercial collections run on proof. If you ask for a cash flow plan, AR aging, funding status or even a quick written summary of sources and uses, a can’t-pay customer usually cooperates. Not because they love paperwork, but because they want you to stay in the boat with them.

5. The collateral is still where it’s supposed to be. This is overlooked way too often. If the equipment is still present, insured and operating normally, that supports the idea that they’re trying to keep the business running, not hide assets.

The Early Signs You’re Dealing With “Won’t Pay”

These are the accounts where time becomes your enemy.

1. Everything is Vague. They live in the world of:

• “Next week”
• “Soon”
• “We’re working on it.”
• “We should be good.”

But they avoid specifics. When you ask for a date, they give you fog.

2. They dodge partial payments. A won’t-pay customer often refuses to do anything today. They want the “big catch-up” payment later, because later buys them time and keeps you off balance.

3. They get defensive when you ask normal questions. If basic structure makes them irritated, that’s information. Examples:

• “Why do you need that?”
• “We’re not sharing financials.”
• “You’ll get paid, relax.”

Those aren’t solutions. Those are control moves.

4. Their story keeps changing. One week, it’s a bank delay. The next week, it’s a controller issue. Then it’s a customer who hasn’t paid them. Then it’s a refinance that’s “almost done.”

Maybe some of it is true, but the pattern matters. Constantly moving targets usually mean you’re being managed.

5. Collateral risk starts climbing. In equipment finance, this is the line you cannot ignore.

Red flags include:

• Refusing to confirm the location
• Insurance lapses
• Equipment was moved without notice
• “Drivers take trucks home” with no tracking
• Rumors of liquidation
• Other creditors filing actions
• Liens are stacking up fast

Even if the customer sounds cooperative, collateral risk changes the urgency.

The Fastest Test: Force a Real Decision

If you want clarity, ask a question that requires a clear answer. “Can you make the regular payment today or tomorrow, yes or no?”

A can’t-pay customer will usually respond with honesty: “No, but I can do $X on Friday.”

A won’t-pay customer usually responds with fog: “I’m working on it.”

Fog is a strategy. Clarity is commitment.

How to Handle “Can’t Pay” Without Getting Played

You don’t need to be harsh. You need to be structured. The best approach is a short-term workout plan that keeps you close to the truth.

What works:

• Keep the plan tight (7 to 14 days, not 60)
• Get dates and amounts in writing
• Set follow-up checkpoints
• Confirm equipment location and insurance
• Request documentation when needed
• Hold them to small commitments quickly

The goal is to stabilize the account, not to “believe in them.”

How to Handle “Won’t Pay” Without Wasting Weeks

This is where collectors hesitate, and hesitation is expensive. If the account is won’t-pay, the job becomes protecting your position and reducing exposure.

That usually means:

• Firm deadlines
• Fewer friendly check-ins
• Moving toward default and cure steps
• Verifying collateral immediately
• Coordinating with counsel when necessary
• Evaluating repossession options within the rules

You can stay professional and still be direct. The point is to shorten the timeline between “late” and “action.” Because won’t-pay customers don’t change when you explain it better. They change when they have to.

Final Thought: Empathy Helps, But Structure Collects

In equipment finance, the best collectors aren’t the loudest. They’re the most disciplined. They know when to work a deal out and when to stop being negotiated with. If you can correctly identify “can’t pay” vs. “won’t pay” early, you’ll recover more money, protect the collateral and save yourself from the most expensive sentence in collections:

“Just give me another week.” 

The Collector Chronicles by Ty Schwamberger is an exclusive series to Monitor that explores the challenges of business-to-business debt collections within the equipment finance industry.

Ty Schwamberger has been involved in Accounts Receivable Management (ARM) within various industries for over 23 years. He is well-versed in the numerous collections & bankruptcy laws, believing great listening and negotiation skills are at the forefront when dealing with those experiencing financial challenges. 

Before joining Elevex Capital as head of Collections in January 2025, he was the AVP of Member Solutions (Collections) at a NE Ohio credit union. Elevex is his entrance into equipment finance, and he is excited to immerse himself in the industry. Ty & his wife live in Brecksville, OH, with their two sons.