The Graying of the Leasing Industry

Have you noticed how many “chronological peers” you have in the

leasing industry? Want to know why? It’s because the leasing

industry’s population is composed mainly of baby boomers. The

reason for this is simple. There are not many leasing companies

that have been around for a generation or more, and even fewer

that have continued to grow and prosper. Take a look at the

leasing industry’s history. We have participated in several

population shifts-major banks, Fortune 500 industrials, Baby

Bells, Regional Banks, etc., etc. As one segment became

disillusioned with leasing, another would take its place.

Unfortunately, this replacement did not expand the number of

people in the industry as a whole, but merely provided a new home

for those about to lose their current situation. Additionally, the

new entrants typically wanted to hire experienced veterans. This

provided an income boost because of the demand, but as one new

group replaced another, the game of personnel musical chairs left

most of the veterans employed, but provided no openings for

trainees.

As I look at the industry today, I do not see this trend changing

in the near term. The reality is the number of true lessors

(criteria: deep pockets) continues to diminish. It is typically

this group that has the financial resources and the long term

perspective necessary to continually bring in new recruits. This

does not mean that the leasing industry in the US is a dying

industry-it simply is in an almost continuous no-growth mode. Can

this be changed? Highly unlikely. Ask yourself this question:

Would you recommend the leasing industry to your son/daughter as a

career choice? If the answer is yes, ask the question again. As I

look at the financial services sector in general, leasing is not a

prime choice for opportunity, when the economy rebounds. It does

however continue to provide solid jobs for those individuals

already in it, who are above average performers. But for the rest-

what happens to them when there is a cutback? What other areas are

the skills from leasing most applicable? Frankly, I don’t know.

But given the knowledge one picks up in financial engineering, as

well as the communication skills, there should be logical career

paths that leasing professionals could transition into. Typically,

when there has been a major cutback in the entire industry or a

specific part of it, those who do not survive either become

brokers and/or form their own companies. The odds against this

approach are extremely high. After a while, they just seem to

disappear.

I am not trying to be morose. But in conversations with a number

of you recently, this issue has been raised. Perhaps the reality

is we are or are perceived as such a specialized financial service

that the utilization of our skills outside of leasing has not been

considered. Maybe it’s time that some group, the Leasing

Foundation or the ELA for example considered this. Food for

thought? Stay tuned.

Readers Agree on Caruso and “The Graying of the Leasing Industry.”

The Graying of the Leasing Industry   -  by  - Ron Caruso.

Hit the nail on the head!! I could not agree more wholeheartedly with Ron’s

analogy of the entire leasing industry. I was recently at an  association

meeting for the NVLA . The quarterly meeting was to elect new officers of

the association  the end result was some old officers were recycled to take

on the same positions as they once had, their were no other candidates.

 I had a moment before leaving the dinner meeting when I looked around and

realized I was the youngest person in the room , by a fair margin and I'm 47

years old. The same thought occurred to me that Ron mentioned in his

article, where are the replacements. I left the leasing industry once before

to pursue other career opportunities only to return several years ago,

because I believe Leasing provides a viable alternative to traditional

financing. However I have to admit I feel  just as morose as Rons article

points out and wondered where my future lies in the industry.

 The pattern Ron mentioned is exactly the pattern I have experienced and know form

personal knowledge other associates in the business that have ultimately

exited, as a result of minimal opportunities that allow for growth and

stability. Their needs to be some serious though put to this issue to

determine the future and viability of the leasing industry as a whole.

Food for Thought.

Ronald Debole leaseman6857@worldnet.att.net

--- 

I have to agree with Ron's comments about other industries not appearing to

believe the skills, knowledge, etc. that an experienced leasing person has

much transfer value.  Back in the recession days of the early 90's when my

then consumer lending oriented employer got out  of small ticket business

equipment financing and closed down the group I had headed up or nearly five

years,  I sent my resume to numerous banks thinking my then 12 years of

experience in credit, collections, documentation and general operations

qualified me for something within the banking industry.  I had even spent

part of those early years with a Wells Fargo affiliate and had undergone

formal Wells Fargo Bank corporate/commercial lending training.  I had an

interview with exactly one bank.

Russell H. Wilder, CLP

RWilder@ATEL.com

---

I agree wholeheartedly with Ron Caruso's article about the "graying of the

leasing industry".  Well written, Ron!

Teri

Teri Gerson, President

Executive Solutions for Leasing and Finance, Inc.

1141 Minisink Way   Westfield, NJ  07090-3726

908.654.1550  Fax 908.654.1553

terigerson@exsolutions.com    http://www.exsolutions.com

---

I read with interest the comments by Ron Caruso regarding the "Graying

of the Leasing Industry".  I agree with him in that this industry is

not, at this time, for the faint of heart.  Over the past several years,

however, we have had many "younger" entrants into the industry who came

with "boiler room" telemarketing skills and sales methodology and

techniques that were based on questionable ethics, at best.

Nevertheless these types of companies flourished during the "high tide"

days of the middle and late 90's.  The problem with all of the young

people that were hired into those companies is that they did not learn

anything about the leasing business or even finance in general.  They

learned great telemarketing skills. 

This whole situation was proliferated by an industry that was obsessed

with achieving technological efficiency and lowering costs to combat

declining margins. Forget the people and leave it all to automation. The

old "belt buckle to belt buckle" sales and service approach that made

the industry was declared an invalid business model.  As an industry we

recruited plenty of young people but we never taught them anything

because, with "application only to $250,000" programs, they didn't have

to learn the skills that we baby boomers needed when we were brought

into the fold 20-25 years ago.

I see the industry coming full circle.  I am reminded once again of the

comments that were made by Ira Romoff at the UAEL/EAEL conference in Las

Vegas in 1998 (I believe).  He so aptly predicted that there would come

a time when the wave of consolidation would come to an abrupt halt, the

huge companies would "implode", and nearly everybody would have to

remember how to actually originate transactions rather than grow through

acquisition.  It certainly appears to me that Ira had nailed it.

In my opinion the current situation in the leasing business has created

tremendous opportunity.  There is still a lot of money to be made but it

is harder. Not because the business is that different but because

customers are smarter, more savvy and more suspicious of us than they

used to be.  They also have different options that weren't available to

them before.  As Mr. Caruso points out, there aren't as many deep

pockets as there used to be but they'll be back.  Just the other day, I

read the story on the state of the Industry.  We can expect 6.4% growth,

overall, for the next couple of years. I suspect double digit growth

will continue in some specialized segments of the industry. 

As far as the talent pool having "transferable" skills, why would a

talented sales or credit analyst want to leave the industry?  The poor

execution by leasing industry management over the past five years has

little to do with the continuing demand for equipment finance programs

in the marketplace.  While I agree that there is probably a percentage

of those folks who are married to a paycheck, there is always that group

with the entrepreneurial bent that realize they can still do what BigCo

was paying them for and probably make more money at it as an

independent. After all the consolidation of the late 80s and early 90s

produced a few companies that have grown rather large and done extremely

well. Tony Galobic and Great American immediately comes to my mind.

Marlin would be another example.

After this last round of consolidation and break-up I am coming to the

conclusion that the equipment finance industry has so many

constituencies, situations, equipment types and industries to serve that

it works better for everyone when it's fragmented, a little less

efficient but more personal.

If one of my kids expressed the interest and desire to get into this

business I would not discourage it.  I would just make certain that they

were equipped with a skill set that gave them the highest probability

for success. If we had trained the young people of the past 5 years this

way the talent pool wouldn't be so "Gray" at this time.

Bob Rodi, CLP

President

LeaseNOW, Inc.

drlease@leasenow.com

www.leasenow.com

1-800-321-LEAS (5327)x 101

---  

Ron Caruso, Greying of Leasing Industry, and advice for young financial

careerists- It would definitely be a mistake to advise anyone to enter any

specialty that relies on capital formation in the private sector.  The

worldwide trend is for government to soak up all of the available growth.  We

used to have a choice between a party who wanted to grow the government twice

as fast as the general economy per year (Dem) or a party who would do their

best to limit government growth to that of the general economy (GOP), but no

more.    Both are now colluding to grow "their business" at 15% per annum,

and no one speaks up to complain.  Remember the talk of ITC returning in the

new tax laws?  What happened to that? 

I advise young people to take necessary government jobs such as firefighter

and police officer(shift work),  then use their plentiful time off to start a

small business.   That way, their financial future will be assured with their

generous public sector pension, and when they pay their 45% all-in tax rate

as a small business owner, at least they will be getting some of it back

directly.

Dave McDonough, lease broker

(954) 494- 0675

DIOMNIDave@aol.com