Ed Latek, president, Latek Capital Corp., Lake Forest, Ill.., doesn’t like to be the center of attention. When he found out that he would be honored with induction to the Rental Hall of Fame, he felt he hadn’t done anything to deserve it.
“While I appreciate the thoughtfulness and feel honored by it, I do not believe I have contributed anything special to the industry. I honestly do not believe there is a more exciting, fulfilling game in the world than watching one start a small business, work 80 hours per week, face every adversity imaginable, but still keep coming back with great tenacity and replicating Winston Churchill’s attitude of ‘We will never give up.’ Several decades later, after the business grew into a significant organization, I had the excitement of playing a small role in helping that entrepreneur sell his ‘life’s work’ for millions of dollars. There is nothing special that I did other than to be fortunate to be in the right place at the right time,” he says.
Latek’s rental journey began when his parents started a United Rent-All franchise in a Chicago suburb in 1959 during his senior year of high school.
“I was intimately involved with the business from the get-go,” he says. Though he went away to college, he came home almost every other weekend to work at the business. “There was never any question what I would do following graduation,” Latek says.
While building the business into a multi-location construction equipment rental operation in the Chicago area, he also became involved with the American Rental Association (ARA) at both the local and national levels.
“During that era, a common area of discussion among rental owners was lamenting the absence of financing that would allow the businesses to grow. Banks and finance companies did not understand the rental industry,” he says.
After becoming ARA’s Region Five director and chair of the education committee in the early 1970s, Latek helped develop a traveling seminar program for the association called “Accounting and Financing for the Rental Exec.”
“As I continued to deepen my relationships with rental owners across the country and continued to learn of the great challenge most had with obtaining growth financing, I realized that the banks would never understand the rental industry, thus leading to my next career within the industry — beginning the development of Reli Financial,” he says.
At that time, some more established rental businesses could procure financing for forklifts, backhoes and other heavy equipment from major finance companies or manufacturers.
“However, it was my strong position that the equipment that produced the greatest return on investment (ROI) was not rolling stock but rather light construction equipment — concrete equipment, pumps, generators, compaction, etc. — and DIY tools. In providing financing to the industry, we based our credit approval upon character — knowing the borrower; assuring one is of the highest integrity and mentally and emotionally strong enough to handle whatever adversity may come; cash flow — must be able to generate revenues in a multiple of the debt service required to service the loan; and collateral. If the first two criteria were met, there would be no need to be concerned for the collateral value as debt would be serviced properly,” Latek says.
After building Reli to the point that it became known as the “banker of the rental industry,” Latek sold the business to a life insurance company in 1986 and continued as CEO until he retired from the business three years later.
After a sabbatical following his retirement from Reli, Latek launched Latek Capital Corp. “for the exclusive purpose of bringing professional investment banking services to the rental industry,” he says.
“Though we began by focusing our attention toward businesses generating revenues in the $1.5 million to $3 million range, by the mid-1990s, we began developing relationships with high-net-worth individuals, private equity groups and family finance offices. Such led to our bringing into the industry several major investor groups, resulting in Rental Service Corp. (RSC), National Equipment Services (NES), United Rentals, RentalMax, Pro Em and Peak. We’ve also been responsible for managing the exit of industry majors, including The Stanley Works divestiture of its national chain of Taylor Rental stores, the original Abbey Party Rents and Classic Party Rental,” Latek says.