For manufacturers and distributors of capital-intensive equipment, financing is increasingly becoming part of the product offering itself. From vehicles and industrial machinery to technology and other productive assets, giving customers access to appropriate financing can facilitate sales, strengthen customer relationships and support long-term growth.
This is where captive finance comes into play.
A captive finance company is a financing entity created by, or closely associated with, a manufacturer or distributor to provide financing solutions supporting the sale or use of its products.
The model is historically well established in the automotive industry, where manufacturers have developed their own financing arms to offer loans, leases and other financial products alongside their vehicles. But the principle extends well beyond automotive.
For manufacturers of industrial equipment, transportation assets or other capital-intensive products, a captive finance structure can help customers spread the cost of acquiring an asset over its useful life rather than funding the full investment upfront.
Several structural developments are supporting this trend.
First, investment requirements are increasing. Digitalisation, automation, artificial intelligence, energy transition and the renewal of industrial and transportation assets all require significant capital expenditure.
Second, the cost of capital remains an important consideration. In France, access to bank financing remained favorable in the second quarter of 2026, with 94% of SMEs and 93% of mid-sized companies applying for equipment loans obtaining most or all of the equipment financing they requested. However, a growing proportion of companies reported an increase in the overall cost of credit.
Third, financing sources are diversifying. Private credit has moved from a relatively niche segment of financial markets towards an increasingly important source of corporate and asset-backed financing. This creates new possibilities for financing companies, including captive structures, beyond traditional bank funding.
Finally, financing is increasingly becoming part of the commercial proposition, particularly for manufacturers and distributors of high-value equipment. For manufacturers and distributors, the question is therefore moving from simply “How do we sell this equipment?” towards “How do we enable our customer to acquire and finance it?”
There is no single reliable global forecast measuring captive finance companies as a standalone market. However, developments in adjacent financing markets provide a clear indication of the direction of travel.
Global private credit assets under management have already exceeded $2 trillion. Moody’s expects AUM to approach $4 trillion by 2030, with asset-backed finance (ABF) emerging as a key driver of future growth. PwC’s 2026 base-case forecast is somewhat more conservative, projecting private credit AUM of approximately $3.4 trillion by 2030.
These developments could have significant implications for captive finance. As institutional investors and alternative asset managers become increasingly comfortable financing pools of assets and receivables, manufacturers may have access to a broader range of funding sources for their captive financing activities.
At Chetwode, we support industrial companies throughout the development of captive finance solutions, from assessing the strategic rationale and designing the appropriate structure to arranging the funding required to support its growth. Combining expertise in captive finance, asset-backed financing and private debt, Chetwode helps manufacturers develop financing solutions tailored to their assets and customers — turning finance into a tool to support sales, strengthen customer relationships and accelerate growth.
