2025 Mid-Year Finance Trends: What Brokers Need to Know
- dylanmyerson
- May 29
- 7 min read
Introduction: When the Market Writes Its Own Playbook
Remember January 2025? We all gathered around our economic forecasts, expecting rate cuts and a quick market rebound. Fast forward to today—May 29, 2025—and the Federal Reserve just held rates steady at 4.25-4.50% for the third consecutive meeting. According to the ELFA, equipment finance volume declined 4.4% year-over-year in April, but credit approval ratios rose to 77.4%, the highest since early 2023.
The equipment finance landscape has transformed dramatically since our beginning-of-year outlook. While we anticipated some more straightforward recovery, what we got instead was something far more nuanced—a market that rewards preparation, punishes assumptions, and creates distinct winners among brokers who adapt quickly.
For equipment finance brokers navigating this environment, success isn't about waiting for perfect conditions. It's about understanding where the opportunities lie right now and positioning yourself to capture them. Let's dive into what's really happening in the trenches and, more importantly, how you can turn these market dynamics to your advantage.
The New Market Reality: Five Forces Reshaping Your Business
1. The Stubborn Rate Environment
The Federal Reserve's May 7, 2025 decision to maintain rates at 4.25%-4.50% reflects ongoing concerns about inflation persistence and global economic uncertainty. This marks the third consecutive meeting without a rate change, signaling that businesses should prepare for rates to remain elevated compared to pre-pandemic levels.
What this means for brokers: Your customers are increasingly rate-sensitive, but they're also realizing that waiting for the "perfect" rate environment might cost them more in the long run. This creates an opportunity for brokers who can effectively communicate the total cost of waiting versus acting now.
2. Infrastructure Spending Still Flowing
According to the Infrastructure Investment and Jobs Act (IIJA) funding tables, projects continue to drive demand in civil, utilities, and road construction through 2026, despite delays in private development starts. This federal commitment continues to create pockets of aggressive lending appetite in specific sectors.
3. The Freight Recession Persists
According to the American Transportation Research Institute’s Spring 2025 Freight Trends Report and other industry sources, national spot truckload rates have declined YoY and smaller carriers continue to exit the market, prompting lenders to tighten credit conditions across transportation financing.
4. Labor Shortages Drive Automation
According to the Equipment Leasing & Finance Foundation's industry report, 32% of surveyed end-users cited labor costs and/or labor scarcity as the reason for financing additional equipment or software in 2025. Businesses aren't just complaining about labor shortages—they're actively investing in solutions.
5. Business Investment Patterns Shift
The U.S. Bureau of Economic Analysis reports that business investment in equipment softened slightly in Q1 2025, while public infrastructure spending held relatively steady, even as private capital expenditures eased. This shift highlights the importance of understanding which sectors are actively investing.
Sector Spotlight: Where Lenders Are Actually Saying Yes
Let's cut through the noise and look at where deals are getting done. Based on current market data and lender feedback, here's your tactical guide to sector opportunities:
Hot Sectors (Where Lenders Are Competing for Deals)
Landscaping and Outdoor Trades According to IBISWorld, the landscaping services industry is projected to grow at approximately 6% CAGR, driven by suburban construction, irrigation systems, and smart landscaping upgrades. This growth, combined with persistent labor shortages, makes landscaping companies attractive to lenders. The equipment holds its value well, and businesses typically have diverse customer bases with predictable revenue streams.
Pro tip: When submitting landscaping deals, highlight how your client serves both residential and commercial customers. Show how their equipment allows them to work year-round (snow removal in winter, for instance). Lenders appreciate seeing diverse revenue streams that aren't dependent on a single season.
Medical and Healthcare Equipment According to the Equipment Leasing & Finance Foundation's 2024 Horizon Report, medical equipment was the most likely vertical to be financed, with an estimated 84% of acquisition volume secured through financing rather than cash purchases. Medical equipment OEM quarterly reports from companies like Medtronic and Stryker indicate rising hospital equipment orders and robust service demand across the U.S. in Q1 2025.
Healthcare providers upgrading imaging equipment, adding telehealth capabilities, or expanding their service offerings are finding receptive lenders. The recurring revenue nature of medical practices, combined with insurance reimbursements, creates the predictable cash flow that underwriters seek.
Infrastructure and Utilities The 2025 Utility & Infrastructure Construction Forecast (FMI Corp/Dodge Data & Analytics) highlights ongoing strong demand for trenching, paving, and directional boring due to grid and broadband upgrades. The Infrastructure Investment and Jobs Act continues to fuel this demand. Contractors working on federally-funded projects have strong revenue visibility that makes lenders more comfortable with these deals.
Equipment in high demand includes horizontal directional drilling rigs (for installing utilities without trenching), specialized utility trucks, and various attachments for existing equipment. The key is demonstrating connection to infrastructure projects—whether through awarded bids, existing contracts, or letters of intent from general contractors.
Emerging Opportunities
Specialty Trade Professionals HVAC contractors, plumbers, and electricians are experiencing steady demand as businesses and homeowners invest in system upgrades and maintenance. These trades benefit from both emergency service needs and planned replacement cycles, creating stable revenue streams that lenders appreciate. Equipment commonly financed includes service vehicles, specialized tools, and diagnostic equipment.
Light Manufacturing and Automation The reshoring trend continues to create equipment financing opportunities. Q1 2025 U.S. Bureau of Economic Analysis figures indicate increased domestic manufacturing investments despite overall softening in private equipment expenditures. Manufacturers investing in domestic production capacity present compelling cases to lenders. The key is connecting equipment purchases to clear business cases: increased efficiency, import replacement, or new contract fulfillment.
Proceed with Caution
Transportation and Trucking As already mentioned, transportation continues to face difficulties. Lenders have responded by tightening underwriting standards for transportation equipment. If you're working with trucking clients, expect lenders to require:
Higher debt service coverage ratios
Larger down payments
Larger fleet requirements
Longer Time in Business
The deals getting approved typically involve established carriers with diverse customer bases strong operating histories, and large fleets. Start-up carriers, owner operators, or those heavily dependent on spot market rates face significant challenges in obtaining financing.
The App-Only Evolution
Application-only programs are one of 2025’s fastest-growing financing channels, with ELFA reporting a 77.4 % approval in 2025. Many lenders have even increased their app only limits recently. However, lenders are still maintaining rigorous deal-quality standards, so ensure you include the following when submitting app-only transactions:
Complete and accurate applications
Clear equipment descriptions with proper documentation
Strong credit profiles with explainable blemishes
Demonstrable cash flow to support payments
Remember: app-only doesn't mean "no documentation." Be prepared to provide supporting information when requested.
Timeline Risk: The Hidden Cost Your Customers Need to Understand
With the Federal Reserve maintaining elevated rates and the Equipment Leasing & Finance Foundation's Confidence Index at 44.5 (below the neutral 50 mark), businesses remain cautious about equipment investments. However, this caution could prove costly.
Consider the impact of delays:
Equipment price inflation due to supply chain pressures
Lost productivity from outdated equipment
Competitive disadvantage in efficiency
Missed opportunities for current tax incentives
Help your clients evaluate the true cost of waiting versus the benefits of strategic equipment acquisition now.
Technology's Ripple Effect: Finding Hard Asset Opportunities
According to the Equipment Leasing & Finance Foundation, 42% of equipment and software end-users currently use generative AI, with another 42% planning implementation within two years. While BSB Leasing focuses on hard asset financing rather than computers or software, this technology adoption drives significant equipment demand:
Manufacturing and Warehouse Automation
Robotic arms and automated guided vehicles (AGVs)
Conveyor systems and sorting equipment
Industrial-grade 3D printers
CNC machines with advanced automation capabilities
Infrastructure Supporting Technology
Industrial HVAC systems for temperature-controlled environments
Backup generators and power management systems
Specialized racking and storage systems
Traditional Industries Modernizing Operations
Construction companies adding GPS-guided equipment
Agricultural operations investing in precision farming equipment
Medical practices upgrading to AI-compatible imaging machines
Logistics companies adding automated loading equipment
Broker Tip: Look Beyond the Technology
When clients mention AI or automation initiatives, dig deeper to uncover equipment needs. Technology implementation often requires supporting hard assets that represent excellent financing opportunities.
Your Mid-Year Action Plan: Seven Strategies for Success
1. Master the Current App-Only Environment
Create a pre-submission checklist that ensures completeness and accuracy. With approval ratios at 77.4%, the deals getting approved are those that tell a complete story from the start.
2. Focus on Strong Sectors
Based on current market data, prioritize your efforts on:
Landscaping and outdoor services
Medical and healthcare equipment
Infrastructure contractors
Specialty trades (HVAC, plumbing, electrical)
3. Communicate Timeline Risk
Help clients understand the cost of waiting in an uncertain rate environment. Equipment price inflation and lost productivity often outweigh potential rate savings.
4. Leverage Infrastructure Opportunities
With IIJA funding continuing through 2026, contractors working on these projects represent strong financing candidates. Network with general contractors and attend pre-bid meetings.
5. Understand Technology's Equipment Impact
Every business exploring AI or automation will need supporting equipment. Position yourself as the financing expert who understands these connections.
6. Document Thoroughly
In a market where lenders are selective, complete documentation sets you apart. Maintain detailed records and be ready to tell your client's story comprehensively.
7. Stay Current on Sector Trends
Market conditions change rapidly. Regular communication with funding sources helps you understand current appetites and adjust your focus accordingly.
Looking Ahead: Preparing for the Next Six Months
As we head into the second half of 2025, several trends from our market analysis suggest continued evolution:
Selective Lending Continues: With approval ratios high but volume down, lenders will likely maintain strict underwriting while competing for quality deals.
Sector Divergence Accelerates: The gap between performing and struggling sectors will likely widen, rewarding brokers who specialize.
Technology-Driven Equipment Demand: As AI adoption accelerates, expect continued demand for automation and supporting equipment.
Infrastructure Momentum: Federal infrastructure spending will continue driving specific equipment categories through 2026.
Conclusion: Success Through Strategic Adaptation
Mid-2025 presents a market that rewards preparation and punishes complacency. The fundamentals remain solid—businesses need equipment to operate and grow, and lenders have capital to deploy for the right deals.
Success in this environment comes from:
Understanding sector dynamics
Preparing comprehensive submissions
Focusing on industries with strong fundamentals
Helping clients navigate timing decisions
Maintaining strong lender relationships
The brokers who recognize these realities and adapt their strategies accordingly will find plenty of opportunities in the current market.
At BSB Leasing, we're committed to helping brokers navigate these market conditions through our syndication expertise and industry knowledge. Together, we can turn market challenges into funding successes.
References
Associated General Contractors of America (AGC). "Construction Spending & Infrastructure Outlook – May 2025." agc.org
American Transportation Research Institute (ATRI). "Freight Trends and Carrier Financial Stress Report – Spring 2025." truckingresearch.org
Equipment Leasing and Finance Association (ELFA). "Monthly Leasing and Finance Index – April 2025." elfaonline.org
Equipment Leasing & Finance Foundation (ELFF). "Monthly Confidence Index – May 2025." leasefoundation.org
Equipment Leasing & Finance Foundation (ELFF). "2024 Equipment Leasing & Finance Industry Horizon Report." leasefoundation.org
Federal Reserve Board. "Federal Reserve Press Release – May 7, 2025." federalreserve.gov
FMI Corp / Dodge Data & Analytics. "2025 Utility & Infrastructure Construction Forecast." construction.com
IBISWorld. "Landscaping Services in the US (2025)." Report code: 56173. ibisworld.com
Medical Equipment OEM Quarterly Reports (Medtronic, Stryker). "Investor Relations & Earnings Calls – Q1 2025."
U.S. Bureau of Economic Analysis (BEA). "GDP and Private Equipment Investment Trends – Q1 2025." bea.gov
