The Discipline Era: Calibrating Credit And Growth In A Neutral Economy

As credit quality takes center stage in 2026, leaders from United Leasing & Finance, Flagstar Equipment Finance and Universal Finance Corp. discuss how they are balancing rigorous underwriting with legislative shifts and the rise of high-tech assets.

As the equipment finance industry settles into the first half of 2026, the optimism of previous years has given way to a more tempered, “neutral” economic outlook. According to recent data from the Equipment Leasing & Finance Foundation, senior leaders have pivoted their focus toward credit quality and portfolio resilience.1 A neutral economy is not a stagnant one; it is an environment that demands precision. From the implementation of the One Big Beautiful Bill Act to the surge in replacement demand and the complex residual questions surrounding AI-driven hardware, funding sources are having to refine their playbooks.

In this Monitor roundtable, we speak with three seasoned executives — Barbara
Kowalczyk of United Leasing & Finance, Rick Kurz of Flagstar Equipment Finance and
Scott Worth of Universal Finance Corp. — to explore how they are maintaining discipline while continuing to provide the liquidity and flexibility that keep American industry moving forward.

With the Equipment Leasing & Finance Foundation reporting a heightened focus on credit quality in early 2026, how have your underwriting standards evolved to balance risk against the current neutral economic outlook?

BARBARA KOWALCZYK: At United Leasing, we apply a practical and disciplined approach to credit underwriting. For every equipment request, we assess how the investment will enhance the customer’s operational performance, drive measurable profitability and strengthen long-term business sustainability. Our evaluation centers on the customer’s ability to meet repayment obligations while maintaining healthy, predictable cash flow to support their broader operations.

RICK KURZ: Our underwriting standards are intentionally designed to remain durable through changing economic cycles. Rather than adjusting our framework in response to short-term shifts in the outlook, we build our standards to perform consistently across
a wide range of conditions. Unless there is a significant and sustained upswing or
downturn in the economy, our core approach remains stable. This consistency ensures that we continue to balance credit quality and risk effectively.

SCOTT WORTH: With more than 40 years of experience as a finance lender to the construction, vocational trucking and landscaping industries nationwide, we take a comprehensive, relationship-driven approach to underwriting. Rather than evaluating a prospective customer solely on how they appear “on paper,” we look deeper to understand who they are, the strengths they bring to their business and the direction they’re working toward.

Our expertise in asset-based equity lending allows us to structure approvals around real, tangible value. Equity plays a critical role in every transaction, whether through a down payment, pledged collateral or a combination of both.

Our team is continuously focused on balancing risk within a dynamic and evolving
market. As we’ve experienced significant growth in recent years, we’ve remained
equally committed to strengthening our internal processes by enhancing our use of technology. By leveraging advanced tools and data-driven insights, we’re able to manage risk more effectively while ensuring our team of experts stays informed on current industry standards and trends.

This thoughtful, forward-looking approach allows us to support our customers with confidence, delivering smart, flexible financing solutions that help their businesses move ahead.

Experts suggest that replacement demand is currently outpacing expansion-
related investment. How are you structuring your funding facilities to help originators and borrowers manage the cash flow pressures of essential equipment upgrades in a higher-cost environment?

KOWALCZYK: We’re seeing more customers turn to used equipment to offset tariff-driven price increases and the higher cost of new inventory. To support them, we have
structured financing solutions such as flexible terms or seasonal payment options that align with each customer’s cash flow realities and ensure essential upgrades remain financially manageable.

KURZ: We structure each facility based on the overall credit strength of the borrower,
with flexibility to incorporate step payments, skip payments or other irregular amortization profiles to help manage near-term cash flow pressures. At the same time, we place significant emphasis on validating that equipment costs are appropriate and not inflated, which helps prevent future challenges for both the borrower and the lender. When credit strength is weaker or when equipment pricing appears elevated, we may require a down payment to help mitigate risk. Across all scenarios, we ensure the equipment financed is essential-use, which remains a core principle of our underwriting approach.

WORTH: As an asset-based lender, Universal Finance provides two primary financing solutions designed to keep businesses moving forward while maintaining financial flexibility.

1. Asset Purchase Solution
In this environment, customers have been worried about using the cash they have. Rather than tying up cash as a down payment, borrowers can use existing assets to secure financing. This is one of the most popular structures we see borrowers utilizing.
The primary benefit of this approach is continuity. By preserving cash and avoiding
large upfront payments, businesses can move forward with equipment acquisitions
without interruption or delay. This structure helps companies maintain momentum, protect liquidity and continue pursuing growth opportunities.

2. Cash-Out Solution
Many borrowers are also opting for our cashout solution as a strategic way to manage
cash flow. Unlike traditional working capital products, this secured option is typically
structured with predictable monthly installments over a few years, resulting in more
affordable terms and increased liquidity.

The advantage is immediate access to capital while maintaining operational stability. With funds in hand, borrowers can address short-term needs, reinvest in their business or navigate seasonal fluctuations, all while leveraging the strength of their existing equipment.

How has the implementation of the One Big Beautiful Bill Act and recent federal interest rate adjustments shifted your appetite for specific asset classes? Are you seeing a meaningful increase in deal flow within construction or domestic manufacturing as a result?

KOWALCZYK: We have not seen a significant increase year-over-year.

KURZ: Our appetite for specific asset classes has remained consistent. Much like our credit standards, our approach to asset evaluation has not shifted with the One Big Beautiful Bill Act or recent federal rate movements. We continue to focus on essential-use equipment across a broad range of industries. By maintaining a generalist strategy that serves the wider U.S. economy, we benefit from strong diversification. This allows us to remain steady through cyclical slowdowns in any single sector while still supporting our clients’ long-term needs. Looking ahead, we expect the One Big Beautiful Bill Act — combined with broader macroeconomic trends — to create meaningful opportunities for the equipment leasing and finance market in 2026, particularly as investment in infrastructure, construction and domestic manufacturing continues to build momentum.

WORTH: As a leading lender in the construction industry, we understand how important
flexibility is amid the ongoing adjustments of the federal interest rate. Today’s borrowers are increasingly savvy and well-informed, and we welcome that. They are paying close attention to how legislative changes impact capital investment decisions, equipment purchases and overall cash flow strategy.

We have seen a meaningful increase in deal flow over the last quarter of 2025, particularly within construction. The return and expansion of bonus depreciation has been a key driver, encouraging businesses to move forward with equipment acquisitions before year-end. For many of our customers, the ability to accelerate depreciation has improved the overall economics of investing in hard assets.

While interest rate adjustments do influence structuring and borrower strategy, they have not dampened appetite for essential-use equipment. If anything, they have reinforced the need for thoughtful financing solutions.

As corporate capital expenditure increasingly shifts toward AI-driven hardware and data centers, how is your organization evaluating the residual value risk of these high-tech assets compared to more traditional “yellow iron” or industrial machinery?

KOWALCZYK: As these high-tech assets traditionally carry lower residual values, we
place greater emphasis on overall credit strength and incorporate appropriate credit
enhancements to mitigate risk.

KURZ: Given the limited historical data on residual performance for AI-driven hardware and data center infrastructure, we are taking a deliberately conservative approach. We prioritize shorter terms and stronger credit profiles to help mitigate the uncertainty inherent in these rapidly evolving asset classes. As more transactional history develops and reliable residual realization data emerges, we will reassess and refine our residual setting methodology. But at this early stage — where technology cycles are fast and market benchmarks are still forming — we continue to anchor our assumptions on the conservative end of the spectrum.

WORTH: Our model and customer base have remained consistent over the years. As an asset-based lender, we focus on financing the essential equipment that keeps construction, vocational trucking and landscaping businesses running day in and day out. These tangible, revenue-producing assets are fundamental to our customers’ success, and we do not anticipate that changing anytime soon.

While advancements in AI and emerging technologies may create new efficiencies and help some smaller companies scale, adoption across our core customer base has been gradual. Many business owners remain cautious, preferring proven methods and practical tools that directly impact productivity and profitability.

At the end of the day, our approach continues to center on understanding the real-world demands of equipment-driven industries and providing financing solutions that support steady, sustainable growth.

As credit discipline becomes a top priority in a cooling 2026 economy, how has your approach to syndication and multi-lender collaborations evolved?

KOWALCZYK: We have a strong and experienced syndications team that actively partners on both the buy-side and sell-side. We collaborate with our partners when credit exposure limits are reached or when vendor programs require support on smaller transactions. Likewise, we welcome opportunities to provide funding assistance for our partners’ own exposure challenges or for deals that fall outside of their credit parameters. Our goal is to create mutually beneficial, reliable syndication relationships that strengthen credit execution and expand capacity for all parties involved.

KURZ: I think it may be a bit premature to describe the 2026 economy as “cooling”, given the leading indicators we’ve seen so far. That said, strong credit discipline is always a priority, and syndication plays a key role in how we manage that. As part of Flagstar’s broader C&I platform, syndication is an important lever for delivering value and executing on our “One Bank” strategy. We like to say that Flagstar is large enough to matter and small enough to care, and this is a good example of that balance.

We start with a close look at customer, equipment and industry concentrations. Syndication gives us the flexibility to manage those exposures, generate fee income and build reciprocal relationships. It also supports an originate-to-sell approach,
which helps us meet the needs of customers, dealers, vendors and other partners without compromising our portfolio objectives.

WORTH: In 2025, Universal Finance had the opportunity to collaborate with a handful of strategic partners, making it a strong and productive year for our team and the customers we serve. By aligning with organizations that share our commitment to the
construction, vocational trucking and landscaping industries, we were able to expand our reach and deliver even greater value to our clients.

As we move into 2026, our focus remains on strengthening those existing partnerships while continuing to build new ones. We’ve already welcomed several new partners to our network and look forward to identifying additional opportunities to collaborate throughout the year.

CONCLUSION
While the road through 2026 may be paved with “neutral” economic indicators, the insights from this roundtable suggest an industry that is anything but passive. Whether it is through the disciplined “all-weather” underwriting frameworks Kurz mentions, the relationship-centric equity models at Universal Finance or the surgical syndication strategies at United Leasing, the consensus is clear: resilience is built on fundamentals. As equipment costs remain elevated and technology continues its relentless march into the data center and beyond, these funding sources are proving that the best way to manage risk is to stay close to the assets and even closer to the customers. By balancing traditional “yellow iron” with the emerging needs of a high-tech economy, the equipment finance sector remains the essential engine driving American infrastructure
and productivity forward. •

¹2026 Equipment Leasing & Finance U.S. Economic Outlook, Equipment Leasing &
Finance Foundation. 2026.