Banks work hard to court small business accounts

BEFORE THEY DECIDE to build a house, contractors who bank with Resource Bank in Mandeville can consult quarterly real estate surveys the bank provides free to builders who are customers. Resource President Bruce Cucchiara says the bank spends "a good deal of money" on the surveys, which include such

The free survey is one way the bank reaches out to its niche small business client, the homebuilder.

Many banks today are expanding their repertoires of products and services designed with small business in mind. The Consumer Bankers Association's 2000 Small Business Banking Study found that in 1999, banks on average earmarked 31% of their marketing budgets for new product promotion. In addition, nearly half of the banks participating in the survey expect to increase their product promotion budgets in 2000. Although most already offer a broad range of products and services to small business clients, they are promoting enhancements such as increased credit limits, new or improved on-line services and products designed to save small business owners time.

Banks also report they are expanding their staffs to focus on small business. Whitney National Bank, for example, recently added four bankers to its local business banking sales force.

In 1999, Whitney began offering its Business Visa Check Card and Whitney Business Advantage, a package that provides 13 discount services to small business owners and their families. Owners have the option to extend the benefits to their employees.

Banks are also using their Internet sites to reach out to small business. Whitneybank.com is under development and the first phase is slated to roll out this summer.

Hibernia made on-line banking available to its small business customers at the end of 1999, says Bill Alt, small business segment manager. Customers can check their balances online, see which checks have been processed and transfer balances from one account to another. They may also pay bills on line. These services are available for both small business and retail consumers.

One feature of Hibernia's on-line service that particularly appeals to small business customers is Credit FYI. Credit FYI allows customers to access credit bureau reports on companies they may want to do business with.

While some community banks are hesitant to proceed full force with online and other technological offerings, Parish National Batik has embraced technological innovations that President Gary Blossman says make the batik unique among its peers.

Parish National, which is headquartered in Covington, in January 2000 launched a service called e-Notifier, which updates customers on their accounts via e-mail when a balance falls below a certain level, when a specific check clears or when a deposit is made in excess of $5,000. Although the service is ilable for all customers, "it's really good for small businesses who have people running around with their checkbooks and Visa cards," Blossman says. "it helps them maintain control."

And instead of viewing just a list of' check numbers and amounts, customers can view pictures of the checks and deposit slips. "Each check number is a hyperlink," explains Blossman.

In addition, for a $25 monthly charge, Parish National provides its customers with CD-RAMA, a CD that includes images of all checks deposited and written and all deposit slips. As lagniappe, the batik also provides CD-RAMAs to its clients' accountants free of charge.

"We're the only batik in the world, that I'm aware of, that can return to (customers) pictures of their checks deposited and the checks their customers sent them," says Blossman. "A lot of business customers will Xerox copies of all the checks they receive, write them down somewhere and then go to the batik and deposit them. Then they're gone and you never see them again."

Even big banks are courting small businesses, which make up a major growth sector of the economy. Bank One says it is the third largest lender to small business in the country.

Batik One Louisiana was the top Small Business Administration lender in 1999, with $57 million in loans, according to the SBA's local office. Hibernia was second with $47 million. In 1999, $119 million in SBA loans were approved in Louisiana, up front $97 million in 1998.

In addition to forming an alliance with the U.S. Hispanic Chamber of Commerce and establishing an award for outstanding woman-owned small businesses, Batik One recently extended the amount of credit available to small businesses through its Credit Express loan program front $35,000 to $100,000. Although credit extension is available in all states now, Louisiana was one of a handful of states in which the extension was rolled out in December 1999.

Credit Express is designed to streamline the process of acquiring credit for small businesses, says Bill Dupuy, market manager for business banking for south Louisiana. The loan process can be handled over the phone and can he turned around in anywhere from a few hours to a few days, depending on the complexity of the request.

Dupuy concedes that Bank One's definition of "small business" is considerably broader than that of community banks. Batik One, says Dupuy, considers a business small if it has annual sales of up to $5 million. Dupuy says the batik focuses on businesses that require up to $1 million in working capital and an additional million in owner-occupied real estate financing.

Conversely, banks like Sewhegmann Batik & Trust, Mississippi River Bank and Resource Bank generally set upper limits of $500,000 on small business loans, though they can grant loans in the millions by partnering with other banks.

Along with the larger banks, community banks are increasing their offerings to small business. But community bankers say they have a basic advantage in luring the small business customer in that they're better able to offer personalized, customized service.

Dan Digby, executive director of Community Bankers of Louisiana, says community banks are filling a void. "We're finding that the larger banks don't want these small business custorners, so certainly the small community bankers are taking advantage of that situation and providing the services they need."

Glenn Geddis, president and chief executive officer of' Scwhegmann Batik, says his batik plans to increase its sales force this year to target both retail and small business customers.

Mississippi River Batik, which is headquartered in Belle Chasse, has a slightly different strategy, says President Michael Bush. The batik has a small stable of loan officers who concentrate on forming close relationships with small business owners by going to where they "eat and meet," such as meetings of the Harvey Canal Industrial Association or local chambers of commerce, he says.