Brean Capital has released its Specialty Finance Securitization Update for the third quarter 2025, which highlights market trends and developments in equipment finance and SMB funding sectors.
Highlights from the report include:
Market Update
- Federal Reserve cut policy rate by 25bps on Sept. 17, 2025.
- 10-year Treasury yield increased by ~12bps, reflecting persistent inflation expectations.
- Secondary trading volume in equipment finance and SMB funding fell 27% to $641 million in Q3 2025.
Equipment Finance Sector Update
- Four independent equipment finance deals raised $1.2 billion in Q3 2025, totaling $6.5 billion year-to-date.
- North Mill Equipment Finance accounted for 14% of the year's total segment volume.
- New issue spreads for independent equipment finance deals stabilized, indicating strong market reception.
SMB Funding Sector Update
- SMB funding ABS market saw a slowdown with only three issuances raising $260 million in Q3 2025.
- Year-to-date issuance reached $1.3 billion, with no first-time issuers in the sector.
- NFIB Small Business Confidence Index averaged 99.4, signaling improved creditworthiness among small business borrowers.