Elliott Klass,
General Counsel and Head of Strategy,
Amur

Mike Rooney,
Chief Executive Officer,
Verdant Commercial Capital

Nicholas Sandler,
Co-Founder & Chief Executive Officer,
Stonebriar Commercial Finance

How is the competitive landscape evolving for private independents?

ELLIOTT KLASS: The world continues to shift to a service-first model. Our connectedness, powered by technology, allows us all to expect a personalized, on-demand experience. There is less and less tolerance for clunky, slow, disjointed user experience and geography matters less than ever. This is true in the equipment finance market as well — customers and partners demand seamless, integrated, purpose-built financial solutions. This is a tremendous opportunity for private independents, who are ideally positioned to deliver. On top of this, capital flows are iterating in the direction of specialization, disintermediating banks as the primary source of long-term lending. Both trends augur well for the role of private independents in equipment financing over the medium-to-long term.

MIKE ROONEY: We co-founded an independent 30 years ago, and the keys to our success back then relate well to what we think it takes today. Namely, serve your customer better than your competitors. Outwork them, meet customers face-to-face. Listen better, be creative and deliver more than you promise. Customers will pay a premium if you can solve their problems. Nonetheless, a big difference today is the advantage technology has in making independents more competitive. Independents using technology can construct automated tools and data reporting that many larger, more bureaucratic organizations are simply too embedded with legacy systems to deliver. The speed and agility that technology provides can be a big difference maker for all independents.

NICHOLAS SANDLER: When Stonebriar launched in 2015, we identified a significant gap in the private independent market for mid- and large-ticket leasing, particularly following the withdrawal of GE Capital. This void enabled us to surpass our growth expectations.

In recent years, the landscape has shifted with more independents entering the market, often backed by high-profile sponsors. Additionally, a growing trend has emerged where independents are forming joint ventures with banks, leveraging their sales teams as banks tighten credit standards. These factors have led to increased competition across the sector.

What trends are you seeing in funding and capital markets?

KLASS: The equipment finance sector continues to attract attention — the attention it deserves — from the broader capital markets for its size, diversity, resilience and economy-essential nature. So much of the economic growth we expect to see over the next several years will be powered by the equipment that this sector finances day in and day out. Smart investors with large stockpiles of investable capital are alert to the durable risk-adjusted returns available in the equipment finance sector. Banks will continue to play a large role in our sector, given their inherent cost of capital advantage, but new entrants will continue to provide liquidity to help our market continue its excellent growth trajectory.

ROONEY: For those independents that access the ABS (securitization) market, the news is excellent. Investors in this market are experiencing great performance of equipment-backed portfolios underlying these ABS’s, which in turn is driving down spreads across most asset classes. This is helping independents close the gap between bank cost of funds and the independents’ ultimate cost of funds.

SANDLER: Investor demand for our ABS offerings, warehouse facilities and unsecured debt remains strong. More broadly, capital markets continue to demonstrate a healthy appetite for alternative asset-based investments, as evidenced by the influx of high-profile asset managers into the space.

How do you see the lifecycle of independent equipment finance companies evolving?

KLASS: This is a very exciting time for independent equipment finance companies that are built to scale — i.e., those with market-tested risk-decisioning capabilities, a value-additive servicing platform, access to investible capital and the ability to construct tailored financial solutions that solve the need of vendors and customers nationwide. Given the strength of the sector and the availability of private capital, independent equipment finance companies now have the opportunity to emerge as major market forces, rather than as bit players. However, this requires real investment in risk management and servicing capabilities — after all, the storage business is very different than the moving business!

ROONEY: There is a misconception that all independents are the same. The lifecycle of independents is as varied as the unique products that these independents offer. There are many examples of high-quality independents remaining independent and continuing to overachieve over decades, and we have independents in unique segments where scale matters and joining forces with another player or investor makes sense. There isn’t one path. The strong securitization market has provided regular issuers with a COF’s structure that is leveling the playing field with banks, which makes staying independent more viable. Independents need to bring expertise to clients. If we continue to do that, the “lifecycle” of each independent remains up to us.

SANDLER: The longevity of independent finance companies largely depends on their capital structure, funding sources and ability to generate sufficient transaction volume. Those with robust capital backing and scale can sustain long-term operations, while those with limited volume may struggle to achieve the necessary economies of scale, shortening their lifecycle.

What asset classes or industry sectors are on your hot list today and which are not?

KLASS: In the medium term, the construction and industrial sectors will continue to benefit from strong tailwinds. The American economy continues to be the envy of the world, and this strength will continue to demand much-needed investment in our transportation, energy, logistics and manufacturing infrastructure. Long-term, technology will only continue to be more interwoven in our lives and healthcare investment will be needed to support an aging population. But more generally, we try to avoid the idea of ‘hot lists’ — the most time-tested strategy is to finance strong businesses purchasing revenue-generating, durable assets.

ROONEY: Verdant’s ‘hot list’ remains construction, specialized vehicles, technology, warehouse automation and any essential-use asset that has undergone a meaningful technological upgrade in the last few years. These technological improvements will incent all kinds of businesses to upgrade their fleet or warehouse equipment to take advantage of better technologies. We believe a shortened replacement cycle will benefit most industry sectors.

SANDLER: AI-related infrastructure is one of the most dynamic sectors today. The demand for computing power has surged, and we expect that to continue, considering some projections that AI processing requirements are expected to double every 100 days. We also see continued expansion in the energy sector, both in traditional oil and gas and in power generation, as the grid struggles to
keep up with rising demand. On the other hand, sectors such as over-the-road trucking, alternative energy, coal and alternative currencies remain less attractive in the current market.

How is your team managing credit risk and portfolio performance in today’s uncertain geopolitical, regulatory and economic climate?

KLASS: In any market, there are threats and opportunities, but it requires agility and perseverance to differentiate one from the other. If it was easy, everyone would do it, right? Over the years, we have invested heavily in our data development and analytics — we capture data at every step in our process and mine it constantly for insights. But data isn’t worth much unless the insights it provides are actioned by a dynamic, nimble and relentless team. Investing in the capabilities of our incredible team is an absolute essential.

ROONEY: It’s a fast-moving landscape with a lot of speculation. We are sticking to our processes that brought us here while keeping an eye out if some of the speculation becomes reality. The change most likely to occur is a less stringent regulatory regime. Our industry requires a baseline level of protection, but lessening the burdens of over-regulation usually translates into reduced costs and more timely innovations. We shouldn’t outthink global issues. We don’t know what may happen geopolitically or even domestically with respect to tariffs or inflation. Sit back, pay attention to it, react when necessary, but don’t lose sight of what we must do in the present. Our industry is flexible and resilient. We’ll adjust appropriately when we need to.

SANDLER: Our underwriting focuses on two key questions:
1. Does the business provide a critical function?
2. Is our equipment collateral essential?

Adhering to these principles helps insulate us from broader market risks, though no strategy can fully eliminate exposure.

We closely monitor supply chain disruptions, particularly tariff-related impacts on our customers, and track significant refinancing risks as interest rate volatility remains a concern.

Are you seeing a shift in the balance between new equipment financing vs. sale-leasebacks and refinancing?

KLASS: This is an easy one. We only finance equipment acquisitions and don’t do sale-leasebacks or refinancings.

ROONEY: In the markets in which we compete, we aren’t seeing much change in the mix of new equipment financing vs. sale-leasebacks or refinancing. I do believe that independents that compete in other markets are likely to see much more activity of a refinancing nature. That is a critical role independents provide to customers, and a role from which most banks shy away. Independents that specialize here offer structuring expertise and unique perspectives on how to manage risk. I am proud of the value-add that many participants within our industry deliver in this regard and continue to applaud the independents who specialize here.

SANDLER: New equipment financing remains the dominant transaction type in terms of volume, but we remain quite active in sale-leasebacks. This balance has remained relatively stable since our inception.

What is your overall outlook for equipment finance in 2025?

KLASS: The American economy remains quite strong. Construction continues apace, the transportation market is growing again and new sectors dependent on capital equipment continue to emerge and
develop. The rate market, while elevated, remains stable, which is constructive for capital deployment. While headline risk exists and can’t be ignored, the fundamentals of the market environment are solid and point to a strong 2025.

ROONEY: We are optimistic. Our company fundamentals look very good, our assets continue to perform well, and since we have scaled the business, we are seeing bigger opportunities. We will, of course, remain vigilant to the things we cannot control, such as geopolitical developments, as well as policy initiatives such as import tariffs and U.S. monetary policy that could change our outlook. Our focus is on what we do control, and right now, those trends look very strong.

SANDLER: We anticipate strong demand for both new equipment financing and refinancing opportunities in 2025, driven by growth in AI, energy and other key sectors. However, potential headwinds — including tariffs, government downsizing and persistent inflation — could have an impact on that demand.

Do you have any final thoughts or closing remarks?

KLASS: Equipment finance is such a wonderful industry to be a part of — we play such a vital role in providing America’s businesses with the equipment they need to succeed. On top of that, the level of talent, ingenuity and dedication of those in this space never ceases to amaze. People in our industry care so deeply about what they do and the role they play in the American economy. Amur is excited to be a growing presence in such a vital industry.

ROONEY: I have always loved this business. It is challenging at times, if not all the time, but it remains a fun business. Everyday challenges keep you motivated to find solutions and focused on always getting better. I genuinely believe the equipment finance industry is one of the best industries to be in if you like challenges. You’re motivated and team-oriented and want to improve continuously. We should do a better job at promoting just how rewarding and fun this industry can be, especially for young people choosing a career path.

SANDLER: Last year (2024) was a standout year for Stonebriar, with originations exceeding $3 billion and continued business momentum. In 2025, we embark on an exciting new chapter, integrating into Eldridge Capital Management to further enhance our scale while maintaining the disciplined market approach that has driven our success. We look forward to a promising year ahead. •