Industry is optimistic for crane finance bounce back

By Cheryl Fry14 April 2022

A host of economic issues have not impacted the crane finance market as badly as you might think. Cheryl Fry reports.

The past few years have seen the crane industry go through some changes. Before the Covid-19 pandemic, the sales of cranes were fairly stable and growing.

Because of the delays, many buyers turned to the used equipment market to satisfy their fleet needs. There, too, buyers are finding a limited supply of used equipment coming available.

The Covid-19 years of 2020 and 2021 put pressure on the industry. Although cranes were deemed essential services and many markets continued to stay busy and grow, some markets where the city or state restrictions were more onerous, experienced a slowdown in work.

During 2021 and into 2022, as Covid restrictions eased and vaccinations were in place, projects began to open up and the need for equipment began to grow. However, during this time, many manufacturers suffered short-staffing issues, steel supply issues and components supply issues, which continue to cause long delays in customers and vendors being able to get new equipment into the hands of their clients. In addition to the impact from Covid, the current economic issues and the Russian/Ukrainian war are causing prices to rise and availability to decline. Along with supply prices increasing drastically, fuel prices have reached all-time highs and supplies are limited. New equipment prices are continuing to increase, and continued delays in deliveries can be expected.

Used market surge

Because of the delays, many buyers turned to the used equipment market to satisfy their fleet needs. There, too, buyers are finding a limited supply of used equipment coming available. Many sellers are reluctant to give up their equipment without a definitive delivery date for their replacements. In addition, the short supply of used equipment is causing the prices to rise. All in all, a changing environment is upon us.

When adding equipment to their fleet, companies have choices on how they acquire the equipment. Leasing has generally been a structure used for equipment that may be project-specific. Companies do not need to have the equipment in their fleet on a permanent basis but may need something for a project that will be short-term – 24 to 36 months. Leasing can be an option for these scenarios.

Rentals are available from many vendors who keep a rental fleet of equipment available. This option offers the buyer the ability to work the equipment in their fleet and build up that client base, especially if the client is diversifying into a different market than they currently service. If they find it isn’t a fit, the equipment can be returned to the vendor. Some rentals are available with an option to purchase at the end of the term – this allows the renter to build up some equity in the equipment while working the new equipment into their fleet.

That said, lenders are still lending. Still the most popular structure for financing equipment is a loan or equipment finance agreement (EFA). Many borrowers want to be able to take advantage of owning the asset, building equity in their fleet, using bonus depreciation as a tax strategy and flexibility when it comes to selling or upgrading.

If you are listening to the news – and it’s hard not to do so – you have been hearing that the Fed intends to raise rates this year, at least 5 to 6 times, and a 7th is in the mix. Rising rates and rising prices are pushing businesses to make decisions on equipment purchases quickly. Sellers want to take advantage of the limited supply of used cranes and hoping to get top dollar for their equipment by selling it themselves. With the internet and several sites available to sellers to advertise their equipment, buyers come from all over the world, making the used equipment market even that much more competitive.

User-to-user transactions

Many lenders, in general, do not have much of an appetite for user-to-user transactions but are beginning to open up to looking at them, if the proper due diligence is completed. That said, there are processes and searches that must be done for the benefit of all parties to the transactions – seller, buyer and lender. Sellers should expect that they will need to show proof of ownership and the ownership trail back to a bona fide dealer. The seller should be able to provide a copy of their original purchase agreement or invoice, a copy of the Manufacturers Statement of Origin, (MSO), title or transferable registration. If the equipment is currently financed – a payoff that includes the complete equipment information and lien release language is required. Most lenders will require a sight inspection of the equipment to verify serial numbers and vin numbers, but the buyer should also look at the equipment, in person before any funds are transferred. Buyers should expect that it may take more time for the lender to receive their lien search back and clear any blanket liens that may be on file. With the PPP and EIDL funds that were provided to companies during Covid, we are experiencing many more blanket lien filings from the SBA that have not been terminated, even though the loans have been forgiven. These processes benefit all parties – the lender is certain that the collateral for their loan is free & clear; the buyer does not have to be concerned about another party claiming rights to the collateral and the seller would no longer be liable for any claims to that collateral. It can be a time-consuming process but very necessary.

Dealer relationships

Purchasing equipment from a licensed, reputable equipment dealer can be a much quicker and smoother process. The dealer is responsible to ensure that the equipment is being sold free and clear of any liens. In many instances, a sight inspection may not be required either. If an issue arises with the equipment, the dealer has the service personnel to handle any issues and work with you, as the buyer.

With everything going on in the world, from Covid to supply chain issues to rising fuel prices, 2022 will have to be the year of patience and understanding. Patience as we continue to move towards eliminating many of the Covid restrictions and get back to a normal way of life. Patience as we are getting more and more people back to work, out of their homes and back to their offices. Patience as we wait for equipment and parts to be available in a normal time frame. Understanding that the price of equipment, food and fuel may be on the rise, but also that projects are continuing to open up and jobs are out there. Understand that lenders are still willing to lend so that companies can grow their equipment fleet and satisfy their customers’ and projects’ needs. Our country and its citizens are a very resilient population and will be able to work through all of these ups and downs. Head down – move forward.

Since 1995, Harry Fry & Associates has been providing financing and leasing, along with our funding partners, to the crane and lift industry. HFA is a family-owned and operated company and it is a majority-owned women entity. The company has acquired funding for over $1.5 billion in equipment acquisitions for its customers. 


Cheryl Fry is vice president and an owner in Harry Fry & Associates. Founded in 1995, Harry Fry, their daughter Tonya and the rest of the HFA team provide finance services to crane and lifting clients.

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