Truck Financing Tightens as Banks Retreat from Mid-Sized Fleets

Bank exits squeeze truck financing for mid-size fleets

Truck financing has become more difficult for carriers trying to replace aging equipment after a freight downturn that lasted roughly three and a half years. The challenge is not only that fewer banks are lending to trucking. Many carriers also emerge from the downturn with weaker financial profiles, making them harder to approve under normal underwriting standards.

Kirk Mann, executive vice president and general manager of the transportation vendor solutions business at Mitsubishi HC Capital America, said several banks have left the trucking finance market. The lenders still active include equipment manufacturers’ captive finance companies, a limited number of large independent lenders and some bank-led groups.

“There are a lot of lenders, banks that left,” Mann said. “We’ve had the benefit of being one of the lenders actually lending money in this space.”

The reduction in available credit comes as fleets begin replacing trucks they kept well beyond their normal trade cycles. Mann said activity through Mitsubishi HC Capital’s dealer channel has increased by about 30%, largely because medium and large fleets are addressing deferred replacement needs rather than adding capacity.

That distinction is important for drivers and carriers. The current equipment demand does not appear to be driven primarily by aggressive fleet expansion. Instead, operators are replacing trucks that have accumulated additional mileage and maintenance costs during the downturn. Mann said fleets purchasing new equipment are buying approximately 80% new trucks, with the balance generally consisting of late-model used trucks that remain under warranty and meet fleet specifications.

Financing conditions vary sharply by borrower. Mann said rates can range from about 5.25% for investment-grade private fleets to 12% or more for lower-credit small operators. Smaller carriers may also be required to provide a deposit. Fleets operating between 50 and 200 units are increasingly reaching Mitsubishi HC Capital through dealer relationships, according to Mann.

The pressure on newer carriers has been especially severe. Mann said that, over a three-year period during the downturn, approximately 85% of motor carriers with fewer than two years of operating experience and their own operating authority failed. The prolonged decline in freight volumes and rates left many new entrants without the financial cushion needed to withstand extended periods of weak utilization and low margins.

The downturn also followed an unusually large increase in truck values. Mann recalled that, in January 2023, he and the company’s then-chief credit officer estimated that a Freightliner Cascadia with a 13-speed transmission, a tall sleeper and fewer than 500,000 miles was worth about $45,000. At the time, similar trucks were being financed at approximately $110,000.

Used truck values had risen sharply during the pandemic-era equipment shortage. According to the figures cited by Mann, a typical four-year-old sleeper tractor generally sold at auction for roughly $30,000 to $50,000 during the 11 years between the Great Recession and the COVID-19 pandemic. Values later peaked near $118,000 in early 2022. Class 8 average retail prices had fallen to $60,986 as of September, according to ACT Research data cited in the discussion.

As the market corrected, trucks returned to lenders in large numbers when owners could no longer sustain their payments. Mitsubishi HC Capital has since expanded its asset management operations and improved recoveries on transportation equipment by 15%, according to information cited in the interview.

Mann said the company’s underwriting philosophy has not fundamentally changed. What changed was the condition of the borrowers seeking financing.

“We don’t really change our underwriting philosophy or process,” he said. “But the credit profile of the customer definitely changes during these down cycles.”

For carriers seeking approval, one measure now carries particular weight: cost per mile. Mann said larger fleet lenders want operators to understand the full cost of running their equipment, including driver pay, maintenance, insurance and other operating expenses.

Financial statements from the downturn may not show the same performance seen in 2021. Carriers therefore must be able to explain how their operations are improving and demonstrate control over expenses. Revenue alone cannot compensate for poor cost management, Mann said.

The freight market has shown some improvement after four consecutive years of contraction. Mann said the second quarter of 2026 could mark the end of the longest freight recession on record, although stability remains an important condition for fleets considering larger purchases. Flatbed demand, which reached unusually high levels earlier in the year, has cooled somewhat but remains one of the stronger segments.

For drivers and small fleets, the financing environment means equipment decisions require more planning. Replacing an unreliable truck may be necessary, but approval will depend on the operator’s credit profile, operating history and ability to document the true cost of each mile. The carriers best positioned to obtain financing are those that can show lenders not only a need for equipment, but also a clear plan for managing it profitably.