First Citizens Bank and Sixth Street offer equipment financing solutions

The platform is managed by First Citizens Institutional Asset Management, LLC. It will leverage the capabilities of both institutions to provide mid and large-ticket capital equipment financings ranging from USD 5 million to USD 100 million, with diverse coverage across equipment asset types and industries.

Equipment financing for middle-market companies

Following this announcement, the companies are set to provide the equipment finance industry with market-differentiating financing capabilities. First Citizens Bank’s customers will have access to a wider range of financing alternatives and greater flexibility and certainty of execution.

In conjunction with the launch, Bank of America is structuring and arranging a bilateral USD 300 million warehouse finance facility to fund the Sixty-First Commercial Finance joint venture.

The product’s offering consists of tax leases, loans, capital leases, and progress payment financing. It is designed to serve the equipment financing needs of middle market companies across a range of industries, including transportation, construction, Jones Act marine, discrete and process manufacturing, material handling, air medical helicopters, warehouse distribution, and furniture and fixtures.

Capital equipment financing

America has nearly 200,000 middle market companies, and each of them faces supply chain disruptions not seen in a generation. The combined effects of supply/demand imbalance, international conflicts and the lingering effects of the COVID-19 pandemic led to shortages, delays, and increased costs for businesses.

In the face of these challenges, a growing number of companies are investing in capital equipment such as rolling stock, manufacturing facilities, and maintenance machinery, to gain greater control over their supply chains.

The freight and logistics industry and the construction industry are both projected to grow at 5% per year at least through 2027. Additionally, demand is outpacing production in equipment for infrastructure, transportation, and construction.