Dan Karas Takes an On-Field Approach to Leadership at Allied Affiliated Funding

Dan Karas took over as executive vice president of Allied Affiliated Funding in October of 2020 and has helped guide the company through the last six or seven months of the COVID-19 pandemic. During that time, economic conditions have stabilized and optimism has come back into the market. Karas spoke with Commercial Factor about his expectations for the rest of this year, his goals and strategies for Allied Affiliated Funding, his leadership style and more.  

You took over as executive vice president of Allied Affiliated Funding last October. What has the first eight or nine months at the helm been like? 

Dan Karas: It has been great fun and highly rewarding. Allied started 29 years ago and has been a division of Axiom Bank, N.A. for the past three years. The team is experienced, the clients have long-standing relationships and my overall objective is to rebuild the portfolio following the declines caused by the COVID-19 pandemic. I’ve been in the banking, factoring and asset-based lending business for nearly four decades, and for nearly all of my career, I’ve been involved in building businesses; however, the difference at Allied is the quality of the team and support from senior leadership and the board of directors.

How have things at the business, both for the team and within the market, changed from where things stood when you first started? 

Karas: There are two items that stand out. The first is that the level of uncertainty about the credit and economic environment we all faced in 2020 has become much clearer and more stable. Our existing client activity and the level of new opportunities are indicators of the continued strength of the overall economy. The second is that we have, and will continue to expand, both the breadth of the product capabilities we can deliver as well as our geographic coverage. For example, we added an originator in New York, where we have a substantial number of clients, to drive activity. 

What did you do before joining Allied Affiliated Funding and how has that experience influenced how you approach this role? 

Karas: As I mentioned early, I’ve been in this sector for nearly four decades. I spent the first 20 years building businesses inside large institutions.  My last two stops before joining Allied were with community banks that had factoring divisions. In the first situation, I turned around a business that took unnecessary risk and was losing money. In the second, I started both ABL and factoring from scratch before becoming chief lending officer of a Dallas-based community bank. Over my career, I’ve been through multiple economic cycles, overcome the shocks to our economic system, had many successes and also learned from my failures. It’s the last point, in particular, that helps me with our Allied team so that, together, we can avoid the pitfalls of the business. 

What are your primary responsibilities as EVP of Allied Affiliated Funding? 

Karas: I lead the factoring and ABL division, so my overall responsibilities encompass setting strategic direction, executing on tactical plans to achieve the desired outcome and supporting both the team and our clients in any way needed. But I’m still a salesman at heart and do love helping our originators find prospective clients to continue to build our business. 

How would you describe your leadership style? 

Karas: I grew up playing baseball and revert to the life lessons from the field: It’s important to win and lose gracefully. I believe we’re all teammates trying to deliver the best client solutions at incredible pace and meeting the bank’s overall objectives. But we do so in a fashion that doesn’t prioritize one’s title or primary role; we all support one another in any way needed. This team dynamic makes for an environment where everyone wants to contribute to our success. 

What were your initial goals for the business when you took over and how have you gone about pursuing them? What new goals have you created and how are you going after those? 

Karas: Currently, my overarching goal is to overcome the challenges created due to the pandemic. We have deployed a multi-pronged approach to accomplish this goal, including: (i) ensuring that we retain and expand our relationships with existing clients, (ii) improve brand awareness by expanding our centers of influence relationships and improving our digital marketing strategy, (iii) expanding our geographic market coverage, (iv) broadening our product offering that allows us to service a wider array of prospective clients and (v) focus our attention on industry vertical niches where we have demonstrated expertise.

As the factoring arm of a bank, what sets Allied Affiliated Funding apart from other companies in this space? 

Karas: Our approach is simple conceptually but difficult for competitors to replicate. We deliver operational excellence, which is backed by our high customer satisfaction survey results and long tenure. Our employees average roughly 15 years of tenure with Allied; many of our business relationships go back over 10 years. We accomplish these results because we are experienced, responsive, creative, transparent and competitive. Our team members are massively committed to making the lives of our clients better. 

What are your expectations for the factoring market during the second half of 2021? 

Karas: The first half of the year was reasonably productive, but we were an active participant in the Paycheck Protection Program second draw program and that liquidity deferred the financing need for many of our clients and prospective clients. I’m very optimistic about the second half of this year given the number of opportunities that we have in final documentation, underwriting or in other stages of our origination pipeline. Given the recent Fed announcement that they don’t plan to raise interest rates until 2023, that should bode well for sustained economic growth that will provide a boost to our growth as well.