Truck Credit Shows Signs of Recovery as Lender Metrics Improve

After years of deteriorating credit conditions in the trucking sector, the first concrete signs of recovery have emerged from one of the industry's largest lenders. BMO's transportation segment—overwhelmingly oriented toward trucking—reported significantly improved credit metrics in its fiscal first quarter ending January 31, 2026.

The timing is notable: roughly half of the quarter coincided with the period when trucking rates began their current upward trajectory. The numbers suggest the worst of the trucking credit cycle may finally be behind us.

The Numbers Tell the Story

Several key metrics moved in a positive direction for the first time in years:

• Loan loss provisions plummeted to $39 million, down from $57 million in Q4 2025—a 32% improvement
• Net writeoffs fell to $24 million from $43 million, a 44% decline
• Gross impaired loans declined to CA$563 million from CA$585 million in the prior quarter

For context, total provisions for all of fiscal 2025 were $196 million. The dramatic drop in Q1 2026 suggests lenders are growing more confident in their trucking portfolios.

"Provisions taken by a bank are a function of future liability, so they are considered more forward-looking. Conditions have strengthened enough that the provisions figure for the first quarter plummeted."

What This Means for Fleet Owners

For carriers and owner-operators considering equipment purchases, improving lender sentiment translates to tangible benefits:

• Easier approvals: As lenders see fewer defaults and improving repayment patterns, they become more willing to extend credit
• Better terms: Reduced risk perception often leads to more competitive interest rates and more flexible terms
• Faster processing: Lenders confident in the market move more quickly on applications

The freight market recovery is creating a virtuous cycle. Stronger rates improve carrier cash flows, which improves loan performance, which makes lenders more willing to finance equipment purchases—enabling carriers to capture more of the strengthening market.

Market Context

BMO's improved credit metrics align with broader market conditions. Tender rejection rates have climbed to nearly 14%, indicating carriers have pricing power. Spot rates continue their upward trend, and industry analysts expect the tight market to sustain through 2026.

The long freight recession that began in 2022 pushed many carriers to the brink and made lenders cautious. Now, with capacity tightening and rates rising, the survivors are well-positioned to benefit from improved credit availability.

Looking Ahead

While one quarter doesn't make a trend, BMO's numbers represent the clearest signal yet that trucking credit conditions are turning a corner. For fleet owners who weathered the downturn and maintained their creditworthiness, 2026 may present the best equipment financing environment in years.

The combination of rising rates, tight capacity, and improving lender sentiment creates a window of opportunity. Carriers looking to expand or upgrade their fleets may find financing more accessible—and more affordable—than at any point since the freight recession began.