TFS Financial and WEX have rolled out a new equipment financing program aimed at North American trucking fleets, as the industry shows signs of recovery after a prolonged freight recession. The program, announced Monday by Vancouver, British Columbia-based TFS Financial, is called "Equipment Financing Powered by TFS" and provides equipment financing to WEX Over-the-Road customers.
Program Details
According to FreightWaves, the initiative gives WEX carriers access to TFS's multi-lender financing platform, which matches borrowers with financing providers based on factors such as credit profile, asset type, and loan terms. At the center is TFS's proprietary Match Engine Technology, which connects carriers to a network of more than 70 lending partners.
"I would love to be the fastest and friendliest transportation finance company in the U.S.," Aaron Case, president of TFS Financial, told FreightWaves. "Ideally, we become the one-stop shop for transportation finance."
The program is available to fleets of all sizes, from owner-operators purchasing a first truck to some of the largest transportation companies in North America. According to Noel Glasgow, vice president of sales for WEX's Over-the-Road business, the offering can be used to finance Class 8 tractors, trailers, light-duty trucks, and mixed fleets. "The ultimate goal is to finance any type of equipment that the carrier needs," Glasgow said.
| Feature | Detail |
|---|---|
| Program Name | Equipment Financing Powered by TFS |
| Lenders Network | 70+ lending partners via Match Engine Technology |
| Eligible Assets | Class 8 tractors, trailers, light-duty trucks, mixed fleets |
| Fleet Sizes | All sizes, from owner-operators to top-100 carriers |
| Geographic Scope | North America (WEX Over-the-Road customers) |
Fleet Confidence Rebounds
The collaboration comes as many trucking companies continue to grapple with high operating costs, rising equipment prices, and tighter lending conditions after more than three years of freight market weakness. FreightWaves reported that trucking fleets that delayed equipment purchases during the prolonged freight recession are beginning to return to the market.
"We've been asked a lot about financing equipment, especially this year," Glasgow told FreightWaves. "Because of the economic impact that trucking has suffered over the past few years, a lot of folks have not purchased equipment. Most trucking companies are looking at replacing equipment on a three-, four-, five- or six-year basis, and a lot of them have extended that timeframe because of the freight recession."
Glasgow said fleets that normally would have replaced equipment on a regular cycle are now facing a backlog of purchases. "In a normal year they're buying X amount of vehicles. Now they might need to buy 2X because of what they have done over the past few years," he said.
Case said TFS is also seeing tangible signs that fleet confidence is improving after several difficult years. "It seems like I've been on the road quite a bit meeting with a lot of these fleets, and I'd say the level of confidence in the last eight weeks has really skyrocketed," Case told FreightWaves. "The conversations with the CFOs of all the largest top-100 carriers — people seem to think transportation is back now."
Implications for Finance Executives
For CFOs and treasury directors at trucking companies, this program provides an alternative source of capital for equipment purchases at a time when traditional bank lending remains tight. Portland, Maine-based WEX (NYSE: WEX) is a provider of payment processing and information management services to the commercial vehicle fleet industry. TFS Financial, a transportation lender for over 40 years, uses its experience to match carriers with appropriate financing.
Case noted that truck and trailer dealers are beginning to see order books fill as fleets move forward with replacement purchases that were postponed. "People extended their replacement cycles as long as they really could," Case said. "They held off on replacing units until they knew they had the work, and now it seems like they're starting to replace, which is a great sign for the economy."
The program is designed to accommodate a broad range of trucking companies that may not fit a traditional bank's underwriting model, according to Case. "We've been a transportation lender for over 40 years, so we're extremely familiar with transportation," he said. "If a trucking company has been around for 50 years and they've never missed a payment, we're going to match that with a large bank. If it's a two-truck operation, we'll match them with a lender that fits their profile."
Sources:
