Asset-backed finance enters 2026 with a familiar paradox. Demand for capital across equipment-intensive industries remains steady, yet many borrowers encounter narrower credit pathways than they expect. The issue is not appetite alone. It is fit.
Lenders across the market are underwriting more selectively, applying tighter filters, and relying more heavily on standardized frameworks. Borrowers, meanwhile, continue to operate in environments defined by variability: uneven project cycles, shifting cost structures, and asset utilization that depends as much on execution as on macro conditions.
This divergence is not cyclical noise. It reflects a structural shift in how risk is evaluated and how capital is deployed. In 2026, asset-backed lenders who succeed will be those who combine flexibility with discipline, structuring transactions around how assets perform while maintaining portfolio integrity and capital provider confidence.
The Myth of Market “Normalization”
In family enterprises, clarity is currency. Year-end is the best time to step back and reconnect on the The idea that markets have “normalized” oversimplifies current conditions. While volatility has moderated in certain areas, lending behavior has not reverted to prior norms.
Recent Federal Reserve survey data shows that banks have continued to report tighter lending standards for commercial and industrial loans, even as demand has strengthened for some borrower segments. That dynamic highlights a persistent reality: borrower demand can rise while acceptable credit parameters remain constrained.
For asset-backed lenders, this means opportunity exists, but only for those willing to assess risk beyond standardized signals.
Policy-Driven Lending vs. Reality-Driven Structuring
A defining divide in today’s market is not between banks and non-banks, but between policy-driven lending and reality-driven structuring.
Policy-driven lending emphasizes uniformity. Thresholds, ratios, and exclusions are applied consistently, which supports efficiency and scale. However, this approach can struggle to account for nuance, particularly in asset-heavy businesses where performance varies by equipment type, utilization, geography, and operator capability.
Reality-driven structuring begins with the asset. How does it generate revenue? How consistently is it deployed? What is its secondary market depth? How does value hold up across operating cycles? Two borrowers with similar financial statements can present materially different risk profiles once these questions are addressed.
Independent lenders are structurally positioned to underwrite this way. In 2026, that capability will be less about differentiation and more about relevance.
Asset Intelligence Is Replacing Static Credit Signals
Financial statements remain foundational, but they are no longer sufficient on their own. Historical results often fail to reflect current operating conditions, particularly for businesses that have adapted through supply chain disruptions, pricing volatility, or fleet expansion under pressure.
What is becoming more valuable is collateral intelligence: understanding how assets behave in real operating environments and how liquid they are when conditions change. This includes utilization patterns, maintenance discipline, remarketing dynamics, and end-market demand.
Lenders who invest in asset expertise and industry specialization are better positioned to structure durable transactions. Those who rely solely on backward-looking metrics risk mispricing exposure.
Capital Providers Are Rewarding Discipline
On the funding side, expectations have sharpened. Capital providers are no longer focused solely on origination growth. They are prioritizing consistency, transparency, and portfolio management discipline.
Regulatory reporting and risk reviews continue to point to areas of pressure within commercial credit portfolios, reinforcing the importance of sound underwriting and proactive servicing. Capital partners want clarity around concentration management, asset performance, and how lenders respond when credits shift.
In this environment, flexibility at origination must be paired with rigor after closing. Lenders who demonstrate both are best positioned to maintain stable, long-term funding relationships.
Equipment Demand Remains Constructive, but Uneven
Industry data continues to show healthy levels of equipment finance activity, though performance varies by segment, asset class, and lender type. Credit approvals remain relatively strong by recent historical standards, while delinquency and loss metrics require attention without signaling broad-based stress.
The implication for 2026 is not that risk is elevated across the board. It is that underwriting precision matters more than general market narratives. Segment-level understanding and asset-specific insight will increasingly determine outcomes.
When leadership tracks are clear, transitions feel natural instead of disruptive.
Borrowers Are Choosing Partners, Not Products
Borrower behavior is also evolving. Equipment buyers are more intentional about lender selection, not just on pricing, but on predictability and alignment.
Many have experienced deals that appeared viable early, only to unravel late due to rigid credit interpretations or internal misalignment. As a result, borrowers value lenders who communicate clearly, ask informed questions upfront, and remain engaged throughout the life of the transaction.
This shift favors lenders who act as long-term partners rather than transactional gatekeepers.
What 2026 Will Demand from Asset-Backed Lenders
A disciplined capital plan allows you to move faster when opportunity strikes. A complete plan should Three attributes will define strong platforms in 2026.
Judgment. Technology and analytics matter, but experienced credit judgment informed by asset knowledge and industry context remains decisive.
Alignment. Effective lenders ensure cohesion between origination, credit, servicing, and capital markets. Fragmentation increases risk. Alignment mitigates it.
Accountability. Lenders who stand behind their structures, communicate transparently, and engage early when credits evolve will build durable franchises.
Independent lenders are not replacing banks or captives. They are increasingly complementing them, particularly where nuance matters and standardized frameworks fall short. In a constrained environment, independence enables flexibility. Discipline makes it sustainable. The lenders who balance both will define leadership in asset-backed finance in 2026.
Author Bio
Pat Hoiby is the Founder and Chief Executive Officer of Equify, LLC, the parent company of Equify Financial, Equify Business Funding, Equify Risk Services, and Innova Technologies. He leads an integrated commercial finance platform focused on asset-backed lending, working capital solutions, and risk management for equipment-intensive industries including construction, transportation, manufacturing, and energy.
Read the article on ABF Journal’s The Pulse: Thought Leaders of the Middle Market Capital Ecosystem.