As yet another equipment leasing and financing veteran heads into retirement, the Monitor caught up with Bob Krause one last time to get an overview of his career, what’s kept him in the industry and what he sees on the horizon
Robert KrauseFormer SVP, Stering National Bank
Ask just about anyone active in the equipment leasing sector and they’ll tell you one of the biggest challenges facing the industry today is a lack of new blood. Entire panels at leasing conferences have been devoted to discussing strategies to recruit a new generation of equipment finance executives to take over where the current generation will leave off.
This year, the industry loses an important figure from that generation with the retirement of long-time industry fixture Bob Krause.
Krause, who retired in June as senior vice president of Sterling National Bank, has spent the better part of his life in equipment finance, and cut his teeth as a financial services executive while the leasing industry was itself still developing.
“I’ve enjoyed the work and found it challenging and interesting,” he says. “I’ve met good people and worked for strong institutions; it’s been a wonderful ride.”
A native New Yorker, Krause never strayed far from home. He began his career doing collections, and later credit evaluation, for New York-based Standard Financial Corporation. Before long he moved in a supervisory role at the company.
In the late 1960s and early 1970s, Krause went to work for an affiliate of the Rothschild banking group and helped found Northern Financial Corporation, which he ran for ten years as its president. That company was bought by Aetna in 1975 and subsequently became Aetna Business Credit (which eventually became Fleet Capital and was finally bought by Bank of America). He soon left that company to help turn around another leasing venture called Todd Equipment Finance. After six years, he moved on again and spent the next decade working first at Commercial Funding, and later at Granat Leasing.
In 1993, Krause came full circle and took over the leasing operation at New York’s Sterling Financial Bank, which years earlier had been acquired by Standard Financial Corporation — the first company he ever worked for.
In spite of all the change he’s seen over the years, Krause says that in principle, the industry has remained fairly consistent. The most notable shift, he says, has been the evolution from leasing to straight financing, evidenced by a recent wave of name changes among companies and associations.
“More and more companies are using equipment finance agreements, the leases that most people write are not really true leases,” he says. “There’s no question there are still true leases being written with residual values and all that, but I think it’s less so than it used to be. There’s less and less talk about true leases.”
Through the years, Krause has done a lot to establish the leasing industry as a vital component of the larger financial services sector and has continually promoted industry cohesion. To this end, he helped launch the Eastern Association of Equipment Lessors (EAEL) in 1979, becoming its first president. He also served on the board of directors of the American Association of Equipment Leasing — now known as the Equipment Leasing and Finance Association (ELFA).
Krause sees the associations as powerful glue that holds the industry together. “I think the associations are very important. First of all they provide a forum for us all to network when we get together. The ELFA does lobbying; they certainly serve an important service there is no question about it,” says Krause. “The associations lend a sense of community to the business.”
Commenting on the current market correction, Krause says he suspects the impact on the equipment financing sector will be negligible at best. “I can tell you there’s still plenty of competition, we see that when we go after a portfolio and see how many other people are looking at it,” he says. “So I don’t see that the industry has been terribly hurt. Some of the larger companies have gotten into some trouble, but at this point I don’t think we’re in a crucial stage.”
After so many years in one industry, Krause says he is reluctant to make a formal break. “I’m retiring from Sterling but I’m letting people know I’m available should anybody need me,” he says, then jokes: “I’m a little concerned about what I’m going to do with myself.”
In truth, Krause says he is looking forward to enjoying his retirement. Among other things he says he plans on spending time at the lakefront home he owns in bucolic Putnam County watching his three grandchildren grow up. But he says he will always look back on his time in the equipment finance industry with fond memories.
“This is an industry that has treated me well, that I’ve enjoyed being in, earned a good living at and got a lot of job satisfaction at,” he says. “I would think that anyone that had an inclination to do this kind of work would find it the same.”
Christopher Moraff is the associate editor of the Monitor.
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