What is an Equipment Sale Leaseback?
An equipment sale leaseback is a financial arrangement where a company sells its equipment to a leasing company or financial institution and then immediately leases it back for continued use. Essentially, it’s a way for a business to free up cash tied to equipment it owns while still retaining access to that equipment for its operations.
Here’s how it typically works: the company sells the equipment at its current market value, receiving a lump sum payment. Then, it enters into a lease agreement with the buyer to rent the equipment back, usually paying lease payments over a set term. At the end of the lease, depending on the terms, the company might have the option to repurchase the equipment, renew the lease, or return it.
This setup can be useful for businesses needing liquidity—say, to pay off debt, fund expansion, or manage cash flow—without losing the ability to use critical assets like machinery, vehicles, or tech hardware. It’s kind of like turning a fixed asset into working capital while keeping operations running smoothly. The downside? You’re committing to lease payments, and over time, that might cost more than the original sale proceeds, depending on the terms and interest rates baked into the deal.

IRS Considerations
When it comes to IRS tax considerations for an equipment sale-leaseback, there are several key points to keep in mind. The tax implications depend on how the transaction is structured and how the IRS views it—whether as a true sale and leaseback or as something else, like a disguised loan. Here’s a breakdown:
1. Sale of the Equipment

• Capital Gains Tax: When you sell the equipment to the leasing company, the IRS treats it as a sale of a business asset. If the sale price exceeds your adjusted basis (original cost minus depreciation), you’ll likely owe capital gains tax on the difference. For example, if you bought a machine for $100,000, depreciated it down to $40,000, and sold it for $80,000, you’d have a $40,000 taxable gain.
• Recapture of Depreciation: If you’ve taken depreciation deductions on the equipment, part of the gain might be taxed as ordinary income rather than capital gains under Section 1245 rules. This “depreciation recapture” applies to the extent you’ve previously deducted depreciation, and it’s taxed at your ordinary income tax rate, which could be higher than the capital gains rate.

2. Lease Payments

• Deductibility: The lease payments you make to rent the equipment back are generally tax-deductible as a business expense under Section 162, assuming the lease is a true operating lease. This can offset your taxable income, which is a big perk—especially if the equipment is still essential to your operations.
• Operating vs. Capital Lease: The IRS distinguishes between an operating lease (treated as a rental) and a capital lease (treated more like a purchase). If the lease term is too close to the equipment’s useful life, or if you have an option to buy it back at a bargain price, the IRS might reclassify it as a capital lease. In that case, you’d lose the ability to deduct lease payments outright and instead have to depreciate the equipment again, which could complicate things.

3. Ownership and Substance Over Form

• The IRS looks at the “substance” of the transaction, not just its label. If they determine the sale-leaseback is really a financing arrangement (e.g., you retain too much control or the terms suggest you never truly gave up ownership), they might disallow the sale treatment. You’d keep depreciating the equipment and treat the cash received as a loan, with lease payments split between deductible interest and non-deductible principal repayment.
• Factors they consider include: who bears the risk of loss, who pays for maintenance, and whether the lease terms effectively guarantee you’ll reacquire the equipment.

4. Potential Benefits

• Cash Flow Without Losing Deductions: By selling the equipment, you get immediate cash, and if structured right, the lease payments keep flowing as deductible expenses. This can be a tax-efficient way to manage liquidity.
• Avoiding Double Taxation: If done properly, you avoid owning the asset while still using it, sidestepping property taxes or other ownership-related costs that might apply in some states (though this varies).

5. Risks and Pitfalls

• Audit Scrutiny: The IRS sometimes flags sale-leasebacks for review, especially if the sale price seems inflated or the lease terms look suspicious. Documentation matters—keep appraisals, lease agreements, and business purpose justifications airtight.
• Loss of Depreciation: Once you sell, you can’t claim further depreciation on the equipment unless the lease gets reclassified as a capital lease, which might not be what you want.

Practical Example: Say your company sells a $200,000 piece of equipment (fully depreciated, so basis is $0) for $150,000 and leases it back for $3,000/month over 5 years. You’d report a $150,000 gain, likely as ordinary income due to depreciation recapture, taxed at your business rate (e.g., 21% for a C-Corp, so $31,500 in tax). Then, you deduct $36,000/year in lease payments, saving you taxes on that amount annually (e.g., $7,560/year at 21%). Over time, the deductions could offset the initial tax hit, but you’d need to crunch the numbers based on your rate and timeline.
Conclusion: The IRS is fine with sale-leasebacks as long as they’re legit—real ownership transfer, fair market value, and a genuine lease. Consult a tax pro to structure it right, especially for big-ticket items, because missteps can trigger reclassification or penalties.

FASB Considerations
When addressing Financial Accounting Standards Board (FASB) considerations for an equipment sale-leaseback, the focus is on how the transaction is accounted for under U.S. Generally Accepted Accounting Principles (GAAP), specifically ASC 842, the current standard for leases. A sale-leaseback occurs when a company sells an asset, like equipment, and then leases it back from the buyer, allowing it to free up capital while retaining use of the asset. Here’s a comprehensive look at the key FASB considerations:
1. Determining if the Transaction Qualifies as a Sale
To account for the transaction as a sale, FASB requires that control of the equipment transfers to the buyer-lessor. This aligns with the revenue recognition principles in ASC 606 and includes criteria such as:

• The buyer-lessor must have the ability to direct the use of the equipment.
• The buyer-lessor must obtain substantially all the remaining economic benefits from the equipment.

If these conditions are not met, the transaction does not qualify as a sale and is instead treated as a financing arrangement.
2. Classification of the Leaseback
The leaseback’s classification—either as an operating lease or a finance lease—is critical under ASC 842:

• Operating Lease: Indicates the seller-lessee has relinquished control, allowing the transaction to be treated as a sale.
• Finance Lease: Suggests the seller-lessee retains significant control, resulting in a “failed sale” where the transaction is accounted for as financing.

The classification depends on factors like the lease term, present value of lease payments, and whether the lease includes options that mimic ownership (e.g., a purchase option at a bargain price).
3. Accounting Treatment Based on Classification
The accounting treatment hinges on whether the transaction is a sale and the leaseback type:
If the Leaseback is an Operating Lease (True Sale):

• Derecognize the Equipment: Remove the equipment from the seller-lessee’s balance sheet.
• Recognize Gain or Loss: Record any difference between the sale price and the equipment’s carrying value immediately.
• Lease Accounting: Recognize a right-of-use (ROU) asset and lease liability based on the present value of lease payments, with payments expensed over the lease term.

If the Leaseback is a Finance Lease (Failed Sale):

• Retain the Equipment: Keep the equipment on the balance sheet, continuing to depreciate it.
• Financial Liability: Record the sale proceeds as a liability (akin to a loan), not revenue.
• Payments: Allocate lease payments between interest expense and liability reduction over time.

4. Additional Considerations

• Repurchase Options: If the seller-lessee has an option to repurchase the equipment (e.g., at a price below fair value), it may prevent the transaction from qualifying as a sale, leading to financing treatment.
• Disclosure Requirements: ASC 842 mandates disclosures about sale-leaseback transactions, including terms, financial statement impacts, and recognized gains or losses.

Practical Example: Imagine your company sells equipment with a carrying value of $100,000 for $120,000 and leases it back:

• Operating Lease: You’d recognize a $20,000 gain, remove the equipment from your balance sheet, and record an ROU asset and lease liability for the leaseback.
• Finance Lease: You’d keep the equipment on your books, record the $120,000 as a liability, and account for payments as financing costs, not a sale.

Conclusion: FASB considerations for an equipment sale-leaseback center on verifying the transfer of control and correctly classifying the leaseback. Proper application of ASC 842 ensures the transaction reflects its economic substance—either as a sale with an operating lease or a financing arrangement with a finance lease. Given the complexity, consulting an accounting professional is advisable to ensure compliance.

Read the original blog post here from March 2, 2025.

Purchasing an excavator is a major financial commitment, so it’s essential to familiarize yourself with the buying process and make a well-informed choice.  Below is a general guide to help you navigate buying and financing an excavator:

• Determine Your Needs: Before buying a excavator, you need to determine the type of excavator you need for your current and future projects. There are several types of excavators available, including crawler excavators, wheel excavators, dragline excavators, mini excavators and skid steer excavators. Each type of excavator has its own advantages and disadvantages, so it’s important to choose the one that is best suited for your short and long term needs.
  
  
• Choose an Excavator Dealer: Once you have determined the type of excavator you need, you should choose a reputable dealer. Look for a supplier that has experience in the industry and offers quality excavators. You can ask for referrals from other contractors or search online for reviews and ratings.
  
  
• Shop the Auctions: Purchasing a used excavator at an auction can be a more affordable option for those on a tight budget. However, it is important to thoroughly inspect the excavator before making a purchase to ensure it is in good working condition.  Depending on the age of the excavator, most lenders will finance excavators purchased at an auction house.
  
  

• Check the Excavator’s Condition: Before finalizing the purchase, it’s important to check the excavator’s condition thoroughly. You should inspect the excavator’s structural integrity, mechanical components, electrical system, and safety features. If possible, you should also test the excavator’s performance to ensure it’s in good working condition.
  
  
• Determine the Total Cost: In addition to the purchase price of the excavator, you should also consider the cost of transportation, installation, maintenance, and insurance. These costs can add up quickly, so it’s important to factor them into your budget.
  
  
• Choose a Financing Option: Once you have determined the total cost of the excavator, you should consider your excavator financing options. You can choose to pay for the excavator in cash, obtain a loan from a bank or financial institution, lease or rent the excavator.
  
  
• Cash Payment: If you have sufficient cash reserves, you may choose to pay for the excavator upfront. This option provides the advantage of avoiding interest payments and owning the excavator outright.
  
  
• Bank Loan: If you don’t have enough cash reserves, you may obtain a loan from a bank or financial institution. The loan amount and interest rate will depend on your credit score, business history, and collateral. You should compare the interest rates and terms of different lenders to choose the one that suits your needs.
  
  
• Lease: If you don’t want to commit to a long-term investment, you can choose to lease the excavator. Leasing provides the advantage of lower monthly payments and flexibility to upgrade or return the excavator at the end of the lease term. However, you won’t own the excavator at the end of the lease, unless the lease has end of term purchase options.
  
  
• Finalize the Purchase: Once you have chosen the financing option, you should finalize the purchase. You should review and sign the purchase agreement, financing agreement, and any other legal documents. You should also make the necessary payments and obtain the necessary permits and insurance.
  
  
• Maintenance and Operation: After buying your excavator, it’s important to maintain and operate it properly. You should follow the manufacturer’s recommendations for maintenance, hire qualified operators, and ensure the excavator is operated safely and efficiently. This will help prolong the lifespan of the excavator and minimize downtime and repair costs.
  
  

Should I Buy a New or Used Excavator?

The decision to buy a new or used excavator depends on a variety of factors, including your budget, the purpose of the excavator, the expected usage, and the availability of financing.
If you have a higher budget and require a excavator with the latest technology, a new excavator may be the better option. New excavators often come with warranties and maintenance packages, which can give you peace of mind and ensure that the excavator operates reliably. Additionally, a new excavator can offer the latest safety features and meet the most current industry standards.

However, if your budget is more limited or you don’t need the latest technology, a used excavator could be a more cost-effective option. Used excavators are often significantly cheaper than new excavators, which can save you a lot of money upfront. Additionally, used excavators that have been well-maintained and inspected can still provide reliable and safe operation.

Ultimately, the decision to buy a new or used excavator will depend on your specific needs and circumstances. Before making a decision, you should thoroughly research the options available to you, consult with experts in the field, and weigh the pros and cons of each choice.
​
Popular Websites to Buy Excavators:

When purchasing an excavator, several websites offer a wide selection of new and used machinery. Here’s a list of some of the most popular websites to buy excavators:

•  MachineryTrader.com – One of the most comprehensive platforms for buying and selling construction equipment, including new and used excavators from various manufacturers.

•  RBAuction.com – Ritchie Bros is a global marketplace for heavy equipment, including excavators. Ritchie Bros. holds online and live auctions and has a massive inventory from top brands.

•  IronPlanet.com – IronPlanet specializes in used heavy equipment, offering detailed inspection reports, bidding options, and buy-it-now features for a wide range of excavators.

•  EquipmentTrader.com – Offers a marketplace for new and used heavy equipment, including excavators, with a focus on local listings.

•  CatUsed.cat.com – Caterpillar’s official used equipment website, featuring high-quality used excavators, often with warranty options.

•  MyLittleSalesman.com – A well-established marketplace for construction equipment with listings for new and used excavators from various dealers and private sellers.

•  Facebook.com/Marketplace – A leading marketplace for private party equipment sales.

Each of these websites offers different buying options, from direct purchases to auctions, providing flexibility for different needs and budgets.  It’s always a good idea to do your research and compare prices and features before making a purchase. Additionally, be sure to check the seller’s reputation and read customer reviews before making a purchase to ensure that you are getting a quality excavator.

Excavator Financing Options:

There are several financing options available for companies looking to purchase an excavator:

• Bank Loans: Traditional bank loans are a common financing option for purchasing an excavator. Banks typically offer competitive interest rates and repayment terms that can range from several months to several years.

• Equipment Financing: Some lenders specialize in providing financing for equipment purchases, including excavators. These lenders may offer more flexible repayment terms or better rates and terms compared to other financing options.

• Equipment Leasing: Leasing an excavator can be a cost-effective way to access the equipment without a large upfront investment. Leasing terms can range from short-term rentals to long-term leases, and some may include maintenance and repair services.

When considering financing options for an excavator purchase, it is important to carefully evaluate each option and compare interest rates, repayment terms, and any additional fees or charges. It may also be helpful to consult with a financial advisor or accountant to determine the best financing option for your specific situation.

Read the original blog post here from September 29, 2024.

Buying a crane can be a significant investment, so it’s important to understand the process and make an informed decision. Here is a complete guide to buying and financing a crane:

1. Determine Your Needs: Before buying a crane, you need to determine the type of crane you need for your current and future projects. There are many types of cranes available, including tower cranes, mobile cranes, crawler cranes, and overhead cranes. Each type of crane has its own advantages and disadvantages, so it’s important to choose the one that is best suited for your short and long term needs.
   
   
2. Choose a Crane Supplier: Once you have determined the type of crane you need, you should choose a reputable supplier. Look for a supplier that has experience in the industry and offers quality cranes. You can ask for referrals from other contractors or search online for reviews and ratings.
   
   
3. Check the Crane’s Condition: Before finalizing the purchase, it’s important to check the crane’s condition thoroughly. You should inspect the crane’s structural integrity, mechanical components, electrical system, and safety features. If possible, you should also test the crane’s performance to ensure it’s in good working condition.
   
   
4. Determine the Total Cost: In addition to the purchase price of the crane, you should also consider the cost of transportation, installation, maintenance, and insurance. These costs can add up quickly, so it’s important to factor them into your budget.
   
   
5. Choose a Financing Option: Once you have determined the total cost of the crane, you should consider your crane financing options. You can choose to pay for the crane in cash, obtain a loan from a bank or financial institution, or lease the crane.
   
   
6. Cash Payment: If you have sufficient cash reserves, you may choose to pay for the crane upfront. This option provides the advantage of avoiding interest payments and owning the crane outright.
   
   
7. Bank Loan: If you don’t have enough cash reserves, you may obtain a loan from a bank or financial institution. The loan amount and interest rate will depend on your credit score, business history, and collateral. You should compare the interest rates and terms of different lenders to choose the one that suits your needs.
   
   
8. Lease: If you don’t want to commit to a long-term investment, you can choose to lease the crane. Leasing provides the advantage of lower monthly payments and flexibility to upgrade or return the crane at the end of the lease term. However, you won’t own the crane at the end of the lease, unless the lease has end of term purchase options.
   
   
9. Finalize the Purchase: Once you have chosen the financing option, you should finalize the purchase. You should review and sign the purchase agreement, financing agreement, and any other legal documents. You should also make the necessary payments and obtain the necessary permits and insurance.
   
   
10. Maintenance and Operation: After buying your crane, it’s important to maintain and operate it properly. You should follow the manufacturer’s recommendations for maintenance, hire qualified operators, and ensure the crane is operated safely and efficiently. This will help prolong the lifespan of the crane and minimize downtime and repair costs.

Should I Buy a New or Used Crane?
The decision to buy a new or used crane depends on a variety of factors, including your budget, the purpose of the crane, the expected usage, and the availability of financing.
If you have a higher budget and require a crane with the latest technology, a new crane may be the better option. New cranes often come with warranties and maintenance packages, which can give you peace of mind and ensure that the crane operates reliably. Additionally, a new crane can offer the latest safety features and meet the most current industry standards.
However, if your budget is more limited or you don’t need the latest technology, a used crane could be a more cost-effective option. Used cranes are often significantly cheaper than new cranes, which can save you a lot of money upfront. Additionally, used cranes that have been well-maintained and inspected can still provide reliable and safe operation.
Ultimately, the decision to buy a new or used crane will depend on your specific needs and circumstances. Before making a decision, you should thoroughly research the options available to you, consult with experts in the field, and weigh the pros and cons of each choice.
Popular Websites to Purchase a Crane:
There are several websites where you can purchase a crane. Here are some of the most popular:

1. CraneNetwork.com – This is a great website for buying and selling new and used cranes of all types. It has a vast inventory of cranes from trusted brands and sellers.
   
   
2. Bigge.com – Bigge Crane and Rigging Co. is one of the largest crane companies in the world, and their website is a great place to buy or rent a crane. They have an extensive inventory of cranes of all sizes and types.
   
   
3. Mascus.com – This is a global marketplace for heavy machinery, including cranes. You can find both new and used cranes from sellers all over the world.
   
   
4. IronPlanet.com – This is another website that sells both new and used cranes, as well as other heavy equipment. They offer auctions and fixed-price listings, so you can find the right crane at the right price.
   
   
5. EquipmentTrader.com – This website has a large inventory of cranes for sale from dealers and private sellers. You can search by type, brand, location, and other criteria to find the perfect crane for your needs.

It’s always a good idea to do your research and compare prices and features before making a purchase. Additionally, be sure to check the seller’s reputation and read customer reviews before making a purchase to ensure that you are getting a quality crane.
Crane Financing Options:
There are several financing options available for businesses looking to purchase a crane:

1. Bank loans: Traditional bank loans are a common financing option for purchasing a crane. Banks typically offer competitive interest rates and repayment terms that can range from several months to several years.
   
   
2. Equipment financing: Some lenders specialize in providing financing for equipment purchases, including cranes. These lenders may offer more flexible repayment terms or better rates and terms compared to other financing options.
   
   
3. Leasing: Leasing a crane can be a cost-effective way to access the equipment without a large upfront investment. Leasing terms can range from short-term rentals to long-term leases, and some may include maintenance and repair services.
   
   
4. Equipment auctions: Not really a financing option, but purchasing a used crane at an auction can be a more affordable option for those on a tight budget. However, it is important to thoroughly inspect the crane before making a purchase to ensure it is in good working condition.  Depending on the age of the crane, most lenders will finance cranes purchased at an auction house.

When considering financing options for a crane purchase, it is important to carefully evaluate each option and compare interest rates, repayment terms, and any additional fees or charges. It may also be helpful to consult with a financial advisor or accountant to determine the best financing option for your specific situation.

Read the original blog post here from April 20, 2023.

Canada and The United States are posting great financial numbers and using this time and cash to further expand and upgrade operations. Analysts are bullish on the continued recovery and have a positive outlook for 2019 and beyond.
Mining is back, and it’s planning to stay for a while.
Mining companies of all sizes are seeing an upswing in their revenue and bottom-line profits. Large mining companies such as Rio Tinto, Freeport-McMoRan and Anglo-American reported solid earnings, increasing profit margins and significantly improved cash flow for FY2018. The recovery started back in 2016, has continued for the last couple years, and looks to extend well into the future. Healthy macroeconomic fundamentals, hefty reserves and recent deregulation jump started the sector from its previous slump.
Mining companies are currently profiting from nickel, lead, copper, tin and gold while traditional materials such as coal show signs of stability in North America. The current administration continues to take several actions to help save the U.S. coal industry, their attempts to “save coal” have been a positive sign for those companies that operate in the coal industry.
The mining equipment market will grow with the mining recovery.
Mining companies aren’t the only ones benefiting from the recent recovery. The positive outlook from analysts is extending to the Mining Equipment Market as well. Back in 2016, the global mining equipment market size was valued at USD 120.82 billion, but the latest analysts’ predictions estimate a CAGR of 11.7% that will boost the global mining equipment market to USD 284.93 billion by 2025 according to a recent Grand View Research report.
With such enormous growth projections, mining companies of all sizes in Canada and The United States are taking this opportunity to scale their fleets and improve their machinery to meet the upcoming demand. Mining companies are retrofitting and refurbishing their current equipment to better position themselves to increase drilling, extraction and exploration activities over the coming years. Others are purchasing new and used mining equipment across North America at a rapid pace, which is creates a huge opportunity for lenders that offer mining equipment financing.
Optimistic but careful at the same time.
It’s true that the forecast and outlook for mining in North America remains positive, but it’s important to not forget mining companies will still struggle with problems they have always faced. Issues such as tension over water usage from local communities, political unrest in countries of operation and trends away from coal and fossil fuel to alternative energy sources will always pose a threat to profits and sustained growth.
The mining industry expects to see success well into the future.
Although there are the risks mentioned above, this still doesn’t overshadow the positive trends we’ve seen and expect to see going forward for the mining industry. Analysts anticipate the trends that started back in 2016 to continue for the remainder of 2019 and well into the future.

*This article was originally posted on our Strikingly Blog here on June 1, 2019

New logging equipment sales are off to a strong start, but the lumber market remains volatile.  Industry analysts predict that the record-high lumber prices will continue through 2018 through 2019. Last year’s increased import duties have some worried that high prices could lead to a supply gap among exporters and importers in the United States. Even so, new equipment sales in the United States are already off to a strong start according to recent data from EDA.
 
Let’s take a look at the recent reports, along with some predictions around the logging industry in 2018 and beyond.
 
New Equipment Sales for February
 
As mentioned above, logging equipment leasing is showing promising results to start the year. Here are the most popular equipment types among buyers from EDA’s report:
 
EQUIPMENT TYPE                           BUYERS           UNITS

• LOG LOADER                            41,547              89,621
• SKIDDER                                  46,872             89,598
• GRAPPLE SKIDDER                24,636             60,225
• CHIPPER                                  36,962             58,767
• FELLER BUNCHER                 18,252             43,563
• CRAWLR DOZER LOG           20,806             38,263
• STUMP CUTTER                    23,829             33,041
• SAWMILL                                19,883             25,644
• WHEEL LDR (LOG)                  11,647             23,443
• EXCAVATOR (LOG)                 10,087             23,435

 
We also have data on the top equipment buyers and lenders:
 
Companies Buying Equipment

1. BLUE STAR EQT LLC                DETROIT, MI                             10
2. LOGGING EQUIPMENT           BANDIT                                        5
3. LOGGING EQUIPMENT           MORBARK                                   5
4. TREESMITHS INC                   SPRING BROOK TWP, PA          5
5. LOGGING EQUIPMENT           ALTEC                                          5

 
New Logging Equipment Lenders

1. JOHN DEERE INDL CREDIT                               78
2. CATERPILLAR FIN SVC CORP                           46
3. DE LAGE LANDEN FIN SVC                               25
4. WELLS FARGO VENDOR FIN SVC LLC             18
5. STEARNS BANK                                                  15

 
Growing Demand for Equipment
 
After a few years of stagnation in the industry, Freedonia Group finds that U.S. companies are now ready to make more logging equipment purchases. In fact, according to their predictions, the United States will account for as much as 19% of all global product demand through 2021. What’s the reason for this growth in demand? They point to a few factors. For one, they cite that the rise of construction activity in the U.S will drive the need for newer and better machinery in the coming years.
 
In addition, they also point to increased roundwood production and the use of logging methods that require higher-end equipment as the cause for the growth in demand. Around the world, other countries are expected to see an increase in logging equipment purchases.
 
Brazil, for instance, is expected to record greater increases in equipment purchases at around 6.5% annually through 2019. Smaller countries like Poland, Finland, New Zealand, and Indonesia will also see above-average growth in purchases over the next few years.
 
Looking Towards the Future
 
Even though the prices for lumber continue to remain high, many industry experts predict that demand for forestry equipment will continue to rise all the way through 2019. The United States is expected to lead all other countries in new logging equipment purchases, although buyers in the Asia/Pacific region will still play a considerable role. 

The Electronic Logging Device
 
The Electronic Logging Device (ELD) is a device aimed at limiting the time drivers spend behind the wheel.  It will ensure that drivers spend no more than 50 hours in service each week, and they must take a mandated two days off afterward. The hope is that the roads will be safer with less exhausted drivers on the road, but it will have wide-ranging effects on the industry as a whole.
 
Carriers will no longer be allowed to haul as many loads as before, and many predict that the added costs of new equipment and administrative duties from ELD will be passed to the consumers in the nation.
 
Increased Demand for the Last Mile
 
E-commerce has blown up over the last decade and is expected to increase even more in 2018. With this rise in demand, many expect to see an increase in the last mile deliveries to businesses and residential neighborhoods. Most heavy trucking companies will need to find a way to add smaller vehicles to its fleet to accommodate these demands in hopes to compete.
 
Cross-Border Competition
 
Hauling freight from Canada and Mexico into the U.S. increased in 2017; however many carriers still rely on American companies to complete the drive after they've crossed the border because of government scrutiny. To counter this, in 2018 we might see more Canadian companies forming partnerships or forming their own U.S. entities to complete the shipment as they haul goods back to Canada. This new competition could result in more liability for them as they uphold U.S. safety standards and regulations.
 
Keeping Up with Technology
 
In addition to ELD, carriers will have to consider the other tech advancements seen in more advanced trailers and trucks. Refrigeration, fuel efficiency software, and other technologies are becoming required under U.S. regulations, so fleet managers must ensure they remain compliant.
 
How Will These Changes Affect Financing?
 
With all of these trends in mind, many still predict the commercial trucking industry to continue to rise in 2018. Last year in December, the industry saw a 37-month high according to research firm ACT. Also, trailer orders were also on the rise with FTR noting 47,000 trailer orders were placed in December.
 
Not all trucks come in equal demand, and in 2017, Class 8 trucks were the clear favorites among buyers according to research firm EDA. Here is the complete breakdown:
 
EQUIPMENT TYPE        UNITS              BUYERS
CLASS 8 TRUCK            849,681              252,705
MECHANIC                      171,994                161,832
CLASS 7 TRUCK                92,711                38,064
CLASS 6 TRUCK             64,438                34,300
SVC VEHICLE BODY         9,763                  4,989
CLASS 5 TRUCK                1,452                     852
BUS                                       454                      200
CLASS 4 TRUCK                 439                      303
CLASS 3 TRUCK                  167                       152
CLASS 2 TRUCK                  137                       106
 
Moving Forward
 
Many expect to see the commercial trucking industry to grow by 3.4% in 2018 which is great news for the U.S. economy and the manufacturing sector as a whole. If firms can adapt to new mandates and technology, it should be a successful year all around. ​

​​Here are the most prominent takeaways from 2017 and what to expect for this year.  With a brand new year upon us, industry-leading research analysts are busy releasing the final numbers for 2017. The machine tool industry is infamous for its sometimes chaotic periods of growth and retraction, but the numbers released from multiple sources confirm that we are indeed in a stable situation with sales and consumption up across the board. 

The Big Buyers for 2017
Industry analysts reported the top 20 biggest buyers and lenders for November of 2017 recently and the numbers look very good and provide hope for the future should the momentum from the last months of 2017 carry over into 2018.
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The top five U.S. buyers listed in the report are the following companies:

• Kennametal                  Pennsylvania, USA                   16
• TE Connectivity            Pennsylvania, USA                    9
• Aerofit                             California, USA                          8
• C&C Machine Tool      Minnesota, USA                         8
• FMI Holdings                Texas, USA                                   8

 
If you read the following insights report you can see the other companies that made significant purchases in November of 2017; however, we'll only focus on the U.S. companies for this piece. Where were these companies buying their machine tools? Well, the EDA report also lists the top 20 lenders for machine tools in the month, and they made significant boosts to help the market as a whole. According to EDA's research, these top five lenders accounted for over 42% of machine tool financing services:
 
The Tops Five U.S. Lenders

• CNC ASSC INC                          72
• BANTERRA BANK                     39
• DMG MORI SEIKI USA             32
• ELLISON TECH                          32
• HARTWIG INC                           30
  ​

The top company, CNC Associates, also made significant strides in their lending numbers, accounting for 15% of the total share of the top 20 companies. These large numbers of units sold or financed are great news for the industry as a whole, and with industry experts predicting that consumption in the U.S. will continue to follow and upwards path, hope is on the horizon.
 
Are We in a Boom or Bust?
As Modern Machine Shop will point out, the machine tool industry has been plagued with tumultuous periods throughout the last could of decades. Before, when manufacturing was steady and followed a linear progression, the machine tools industry and financing also followed suit. However, with U.S. companies taking advantage of cheap labor costs and China continuing to expand its manufacturing sector in recent years, the market experienced sudden dips in demand and consumption of machine tools.
 
Many Are Optimistic
That being said, referring back to the industry analysts' yearly reports, sales and consumption showed promising signs towards the end of 2017. For example, Statista found that machine tool consumption reached into the positive range for the first time in years with 2017 netting a surprisingly significant 1.6% boost over 2016’s numbers. Additionally, research firm AMT pointed out that orders for machine tools rose by 7.6% above 2016’s numbers for the same month researched.
 
All of this being said, nobody knows for sure what the future holds and with shifting political and economic climates, so much can still seem up in the air. All we can go by are the numbers presented by analysts and their predictions for the future. Taking all of those into account, we’d say that 2018 could be another positive year for the machine tools industry.