Brick by Brick: Kreyling Builds Atlantic Union’s New Equipment Finance Business
by Grace A. Garwood October 2020
Creating an equipment finance company in the midst of a pandemic is a complex undertaking at any experience level. Jule Kreyling, president of Atlantic Union Equipment Finance, utilized his 25-year career in equipment finance to navigate unforeseen challenges and establish a successful new company in less than a year.
Jule Kreyling , President, Atlantic Union Equipment Finance
Established in late 2019, Atlantic Union Equipment Finance is led by industry veteran Jule Kreyling and has a national strategy with a strong focus on the bank’s Mid-Atlantic footprint. “We’re looking at companies with revenue exceeding $25 million up to Fortune 500 companies,” Kreyling says. For bank relationships, the company will go lower in revenue and deal sizes.
In terms of asset classes, members of the Atlantic Union Equipment Finance team are generalists but favor harder assets, including transportation, marine, construction, manufacturing and crane rental companies. “Right now, we’re very conservative with industries and companies with energy exposure, or those that are impacted greatly by COVID-19,” Kreyling says. “But we’re also there to support our customers in any way we can.”
Kreyling has a three-pronged business and marketing strategy for Atlantic Union Equipment Finance. “First and foremost, we want to be a good partner for the bank, its customers and prospects,” he says. The company has one regional director of sales embedded within the bank’s footprint who works with bankers and meets the needs of their customers in addition to his own direct origination efforts. “Where he’s actually bringing new customers into the bank, that brings the possibility of adding on other products and services that the bank offers. We want to help make things easier for our customers,” Kreyling says. “That’s always going to be a big focus of ours.”
A second key area is the company’s national direct origination team, which calls on direct end users of equipment. “We now have four [members of the direct origination team], and we’re going to be looking to add a few more over the next year or two,” Kreyling says.
The third and final focus for Atlantic Union Equipment Finance is a capital markets function, which complements the first two strategies. “We buy and sell transactions from other bank and institutional partners,” Kreyling says.
“The more dominant channel, which really encompasses one and two, is our direct origination effort. We want that to be the bulk of what we do,” Kreyling says. “On the capital markets side, we’d like that to ultimately be 20% to 30% of our business. Right now, it’s probably more than that because we’re just getting going, and we don’t have the direct sales force bulked up yet.”
The Path to Atlantic Union
Kreyling began his career in commercial litigation and corporate bankruptcies at Troutman Sanders. After shifting into equipment finance through an in-house counsel position at Textron Financial, he became interested in a management role. The company president and also head of syndications told Kreyling that to be a leader in the industry, he needed to understand sales and the only way to understand sales is to experience it.
“I actually moved from being in-house counsel to being a commission only salesperson for three years to gain that experience,” Kreyling says. He was successful in sales and transitioned into management afterwards, running the southern half of the country for the commercial finance division.
From there, Kreyling moved on to start a series of equipment finance businesses for banks before settling with another banking team for about five years. “There was some shakeup at the executive management level,” Kreyling says. “Within [the] course of a few years, we had three chief credit officers at the bank, two presidents and ended up reporting into three different parts of the bank over time.”
Kreyling and his team decided to make a move. He spoke with a recruiter representing Atlantic Union Bank who introduced him to Dave Ring, who heads up the bank’s commercial businesses. “It just so happens that the bank had already decided to enter the [equipment finance] business,” Kreyling says. “We had lots of calls. Brought our senior management team up to meet with the bank’s senior and executive management team. It just seemed like a really good cultural and strategic fit. We basically started this business for the bank in the fourth quarter of 2019.”
The executive management at Atlantic Union Bank is one of the most down to earth management teams Kreyling has ever met. “They really are pulling in the same direction,” Kreyling says. Through their example, everyone works as a team, with minimal internal competition, which is something that plagues a lot of organizations, according to Kreyling.
Building Out the Business
Kreyling finds that unifying efforts and having a shared vision are key ingredients to successful leadership. “Project a clear understanding to the team of what our short and long-term goals are,” Kreyling says. “We’re a startup, so it’s very important to create an entrepreneurial spirit that everyone kind of feels almost like they’re running their own business.”
As a leader, Kreyling values honesty, transparency and empathy. “Unless it’s something that I’m hearing from the bank that I need to keep confidential, I’m sharing with the team,” Kreyling says. “Where we’re going, what direction we want to go. Not only how much business do we want to do, but how we’re going to get there.”
Hiring great people that are a good cultural fit is also a priority for Kreyling. “Then giving them the authority to do their jobs, trusting them. Not trying to control everything myself,” Kreyling says. “Ultimately, I know I’ve done a successful job when I can leave for an extended period of time — six months, a year — and have 100% confidence that the business will continue to run itself.”
The short-term goal at Atlantic Union Equipment Finance was to reach standalone profitability as soon as possible. “We’ve recently done that,” Kreyling says. “I think we were ahead of expectations, so we started breaking even and then making money on a monthly basis sooner than we projected, which is always good.”
Longer term, the company’s main goal is helping its parent bank grow consistently and diversify its business conservatively. Kreyling and his team also are working toward a small-ticket application only product to offer bank customers and prospects, whether it be at the branch or with the company’s business bankers that deal with smaller businesses.
COVID-19 did not have a negative effect on Atlantic Union Equipment Finance — the timing was right to set up an equipment finance business. In Q4/19 and Q1/20, Kreyling and his team were just getting things set up. “Our focus was on building the pipeline, getting approvals in place, and getting the business up and running, including getting policy and procedures approved and in place, a lease accounting software system implemented, and shelf documents reviewed and approved,” Kreyling says. “All the great things that you need to do when you’re starting this business up from scratch.”
By the time the pandemic hit, Atlantic Union Equipment Finance had only funded approximately five customers, or $15 million in business. “It wasn’t until the second quarter that the funding really started to take off,” Kreyling says. “We didn’t have a legacy portfolio to deal with and we didn’t have clients asking for extensions.”
Kreyling is very proud of how Atlantic Union Bank supported its community through its Paycheck Protection Program efforts. Atlantic Union processed the second highest total number of loans in the state of Virginia and extended the application process to people who were not current customers by successfully processing the loans using a combination of advanced technology and manual effort. The dual process approach enabled the bank to process applications and help a record number of businesses in the bank’s operating footprint.
Kreyling’s industry outlook is cautiously optimistic. Although many customers at Atlantic Union Equipment Finance have postponed equipment deliveries, the activity that he would have expected to see in the normal economy seems to be picking up.
“I’m hopeful we’ll see a stable, if not strong, fourth quarter,” Kreyling says. “Our customers seem pretty optimistic. I’m not sure if they’re optimistic enough to start buying in the fourth quarter, if they’re going to wait until after the election, of if people will start getting a little bit more aggressive on acquiring equipment in the first quarter.” •
Grace A. Garwood is a freelance writer and editor based in Brooklyn, NY. Rita E. Garwood, editor in chief of Monitor, interviewed Jule Kreyling for this article.