Which statement describes a TPO program?

• A. It involves a loan directly from a bank to the borrower with no involvement of manufacturers.
• B. It involves a manufacturer and an equipment seller.
• C. It is a vendor program primarily focused on external funding.
• D. It is a marketing initiative to promote new equipment.

Answer: (B)

Third-party origination in equipment finance means a manufacturer works with an equipment seller to originate a loan through a financing lender. The manufacturer provides the program and terms, the dealer presents it to the customer, and the lender handles underwriting, funding, and servicing. This collaboration between the manufacturer and the equipment seller is what defines a TPO program, making the statement that describes both parties the best fit.

Other descriptions miss the core aspect: a direct bank loan with no manufacturer involvement isn’t a TPO; a vendor program labeled as “external funding” without clarifying the joint origination role lacks the essential collaboration; and a marketing initiative isn’t about financing origination at all.