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Canadian challenger bank Equitable Group has reached an agreement to acquire Bennington Financial Services, a growing privately-owned company serving the brokered equipment leasing market in Canada.

Bennington was founded in Oakville, Ontario in 1996 and has developed a strong market position in non-prime equipment leasing.

It has a portfolio of more than $400 million of leases managed by a team of 125 professionals.

The lender finances a wide range of assets with a focus on transportation, construction and food service equipment, has long-tenured relationships with professional leasing brokers throughout Canada, and has developed a specialist approach to adjudication with emphasis on lease structure, security and re-marketability.

Equitable said this transaction furthers its goal of broadening its reach, with diversification into adjacent markets that complement its other secured lending businesses and broker-led distribution model.

Andrew Moor, president and chief executive officer, Equitable Group, said: “We are delighted that the team at Bennington has chosen to join with us to bring a new level of service to customers in Canada’s multi-billion-dollar equipment finance market.

“As Canada’s challenger bank, Equitable is strategically committed to growing and diversifying our secured lending businesses in attractive markets where we can establish distinct competitive advantages.

Equipment finance is one of those markets. With its large, independent distribution network and proven underwriting, servicing and recovery processes, Bennington provides a unique competitive platform to fulfill our ambitions on a profitable, risk-managed basis.”

The acquisition is subject to customary closing conditions and is expected to be finalized on January 1, 2019.

Equitable expects that its funding capabilities will reduce Bennington’s cost of funds by over 100 basis points and will deliver material interest expense savings. This funding access will enable Bennington to increase its participation in high-quality credit segments, grow its equipment financing portfolio beyond what it could support with its current funding facilities, and lend on larger value assets.

Larry Mlynowski, Bennington’s founder and CEO, said: “Our decision to join Equitable is driven by the desire to increase the scale of financial solutions we can offer customers and our broker partners to continue our belief that the best is yet to come.

“Beyond ready access to cost-effective funding, we are culturally aligned with Equitable’s passion for service, commitment to independent distribution and their Challenger Bank philosophy. This business combination will enable us to continue our vision of being an innovative leader in Canada’s leasing industry.”