First Union Corp. is investing $19.5 million in an on-line start-up company that offers bulk-rate discounts to small-business customers.

In return for the funding, Charlotte, N.C.-based First Union will receive a 15% equity stake in BrightLane.com and a seat on the company's board. First Union will also be allowed to sell its banking services at the start-up's Web site and refer its small-business customers to the site for discounts on nonbanking products.

BrightLane.com, based in Atlanta, was formed in April by bank consultant T. Stephen Johnson. The company has partnered with Mindspring Enterprises, PayMaxx Inc., United Stationers, and others to offer discounts to small businesses on items such as office supplies, payroll services, and recruiting.

Kellie Scott, senior vice president and director of e-channels at $235 billion-asset First Union, said BrightLane.com offers a simple way for the banking company to offer those additional services on-line.

"Our goal is to give our small-business customers everything we can," she said. "With this alliance, our customers can take advantage of the functions and discounts that BrightLane has negotiated."

The bank also gets on-line name recognition, she added. "If you go to BrightLane.com, you will see First Union's banking brand."

Of course, if BrightLane.com is a success, the investment could also provide a financial windfall for the banking company.

First Union is following the lead of other banking companies that have profited from Internet-related investments. Chase Manhattan Corp., for example, said this year that its Chase Capital Partners division expects a $240 million return on a $29.5 million investment in StarMedia Network Inc., a Spanish-language Internet service provider. And smaller banking companies such as Progress Financial Corp. in Blue Bell, Pa., and Silicon Valley Bancshares in Santa Clara, Calif., own warrants for shares of dot-com firms that have had initial public offerings.

Ms. Scott said First Union is considering other investments and could reach another deal in the next few months.

"We believe in investing in dot-com companies that tie to our core strategies," she said. "Not only does it give us a leg up on securing partners, but it also has the potential to generate additional revenue."

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