Many equipment manufacturers use national dealer networks to sell their equipment. This works very well because local buyers want to see the equipment before a purchase. But when a customer falls behind on payments for financed equipment, many lenders turn to the same dealer network to handle collections.

We see this quite often when the manufacturer owns a financing arm that provides the credit for these transactions. After all, the dealer brought the customer to the transaction, they sold the equipment, and they’re “already involved,” right?

Well, not exactly.

At NCCI, we regularly work with lenders who’ve learned the hard way that relying on a dealer to handle collections is rarely a good long-term strategy. It often leads to conflicts of interest, inconsistent outcomes, and poor borrower experiences.

In this article, we’ll outline why this is a poor strategy and present an alternative.

1. Dealers Are in Sales—Not Collections

Equipment dealers are great at closing deals and servicing machinery—not managing delinquencies.

Collections require:

• Specialized training in borrower communication
• Sensitivity to compliance and regulatory requirements
• Documentation standards that hold up under audit or legal scrutiny

In addition, many industries impose regulatory guidelines on how this work must be done and even who is qualified to do it.

Expecting a dealer to step into this role often leads to delayed communication, incomplete records, and inconsistent follow-up. It’s not their core competency—and it shows.

2. Manufacturer and Lender Business Relationships at Risk

Every sale that has ever been made was completed on the basis of an existing relationship. It may have been a new one, but in the case of high-value products, a lot of work went into developing it.

When you ask your dealer to handle collections, you’re asking them to:

• Become the “bad guy” with their own customer
• Balance your financial interests with their future sales pipeline
• Possibly strain or lose a customer relationship they’ve worked hard to build

This puts everyone in an awkward position.

Dealers may go soft to preserve relationships—or push too hard and damage your brand. Either way, the outcome is unpredictable.

3. You Lose Control Over the Process

While lenders serving many industries often outsource some or much of the default management process, they do so very carefully so as not to lose control over the process. Loss severity increases dramatically when the lender loses control.

Collections should follow a structured process with documentation at every stage. When a dealer handles it informally, you may not know:

• When contact was made
• What was said
• Whether any arrangement was discussed
• What promises were kept (or broken)

Without a systemized process, you lose the visibility and control needed to protect your collateral or comply with regulatory requirements.

4. There’s a Better Way: Effective Risk Outsourcing

There is a good business reason why lenders fall back on dealers to get delinquent borrowers back on track. They’re not staffed for it. Even so, it’s not a good strategy, but it’s not the risk outsourcing that makes it so.

Risk outsourcing is a mature industry. There are many experienced vendors working in the space, including NCCI Services.

At NCCI, we’ve developed a suite of field services designed specifically for asset-based lenders and finance companies, including:

• In-person outreach by trained field representatives
• On-site collateral inspections to assess condition and usage
• Borrower contact documentation with photo, signature, and time-stamped records
• Loss mitigation support to help resolve delinquencies before repossession is needed

We act as a neutral third party, helping you maintain borrower relationships while ensuring accurate, compliant documentation.

When you handle collections professionally through a good risk outsourcing partner, your dealer gets to stay in their lane, focusing on service, sales, and customer satisfaction. You protect the customer relationship, the dealer’s reputation, and your collateral.

It’s a win-win-win.

Just because your equipment dealer can make a few calls doesn't mean they should. When the stakes are high, the payments are late, and the equipment is at risk, it’s time to bring in a field services partner who does this every day.

Want to improve your collection outcomes without straining your dealer relationships? Let’s talk. NCCI’s nationwide field network and proven processes help lenders stay ahead of delinquency while preserving every business relationship. Visit www.ncciservices.com to learn more.