# OEM Captive vs Independent Broker Financing

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Last modified: 2026-05-29T19:39:17+00:00
Type: efin_guide

## Summary

OEM Captive vs Independent Broker Financing. Comprehensive guide covering the topic in depth, with worked examples, current data, and cross-references.

## Content

Equipment finance access comes through three main channels: OEM captive lenders, independent equipment finance companies, and brokers who shop across multiple lenders. Each has trade-offs.

OEM captives

Captive lenders are owned by equipment manufacturers. Examples:

Caterpillar Financial
John Deere Financial
Komatsu Financial
Volvo Financial Services
Daimler Truck Financial
Kubota Credit


Pros:

Promotional rates on new equipment of their brand
Fast approval through standardized dealer process
Single point of contact for equipment + financing
Manufacturer expertise on the specific equipment
Sometimes longer terms than independents


Cons:

Locked to that manufacturer's products
Used equipment financing usually limited to their brand
Promotional rates can be offset by inflated equipment pricing
Less flexibility on credit and structure


Independent equipment finance companies

Independent lenders are not affiliated with manufacturers. Examples include:

National companies (CIT, First Citizens, Marlin)
Bank-affiliated equipment divisions
Specialty industry lenders
Mid-market independent lessors


Pros:

Brand-agnostic financing
Multiple equipment types in one master facility
Flexible structures (loans, leases, EFAs, $1 buyout)
Used equipment more readily financed
Cross-brand fleet financing


Cons:

No promotional manufacturer rates
Direct shopping required (no integrated dealer experience)
Larger lenders may not be flexible for smaller borrowers


Equipment finance brokers

Brokers shop your deal across multiple lenders. They earn commissions from the funded lender, usually 1-3% of loan amount, included in the rate.

Pros:

Single application, multiple lender quotes
Knowledge of which lenders fit specific scenarios
Useful for borderline credit or unusual deals
No upfront cost to borrower


Cons:

Commission baked into rate (usually 1-3%)
Quality varies widely; some brokers are excellent, some are not
FTC disclosure requirements often unclear
Broker incentives may not align with borrower (push deals where commission is higher)


Which channel for which scenario


ScenarioBest channel

Buying new equipment from one OEMOEM captive (especially with promo rate)
Buying used equipment from dealerIndependent or captive (if same brand)
Mixed-brand fleetIndependent
Borderline creditBroker (shops multiple)
Specialty industry (cannabis, vintage)Specialty lender or broker
Repeat purchases over timeIndependent with master facility
Auction purchaseIndependent with pre-approval
SBA-backed dealSBA-preferred lender (independent or community bank)



FTC compensation disclosure

Brokers must disclose their compensation arrangement under FTC rules. If a broker is reluctant to discuss how they get paid, that is a red flag.

Common arrangements:

Commission paid by lender (most common; included in rate)
Origination fee paid by borrower
Spread between borrower's quoted rate and lender's actual rate


Ethical brokers explain compensation upfront.

Shopping multiple channels

For larger deals, consider getting quotes from all three:

OEM captive offer at the dealer
Independent lender quote
Broker-shopped quote


Compare total cost (rate + fees + structure). Choose the best fit. Use competitive quotes as leverage.

Action steps


Identify your scenario from the table above
Consider getting quotes from at least two channels
Ask each lender or broker how they are compensated
Compare total cost (rate × term + all fees), not just monthly payment
Apply with us and we will route to the most appropriate channel