California business owner Jack Maggiore wasn't looking for a new bank when a BankAmerica Corp. sales officer visited his office and offered a lower rate on his credit line.

Although the rate captured his attention, Mr. Maggiore, president of Royal Glass Co., said what impressed him the most was the sales officer's enthusiasm.

"He seemed really excited about doing business with us," said Mr. Maggiore "We weren't getting that kind of attention and service from our bank." He declined to name that bank.

The BankAmerica sales officer who won Mr. Maggiore's business works in a division formed two years ago to lure California small-business customers away from other banks.

"We take a hands-on, active approach," said Don Pearson, BankAmerica's California manager for relationship business officers.

And it is working, he said. Revenue from that market has increased more than sixfold in the two years, Mr. Pearson said; he would not give a total.

The California unit's holdings of business loans smaller than $1 million increased 35% in the 12 months through June 30, to $2.9 billion, according to Sheshunoff Information Services. Mr. Pearson said businesses served by his division have an average loan size of $400,000.

BankAmerica's approach highlights the torrid competition for small- businesses customers in California, home to Wells Fargo & Co., Money Store, and some of the strongest community banks in the country.

"Everybody is out there selling credit lines," said Greg Armstrong, principal of Inseon, a Walnut Creek, Calif., sales consulting firm. "The customers want someone who will get to know them and work with them to develop solutions for their business."

BankAmerica's face-to-face sales approach may be just what is needed. A recent survey of 35 banks by the Consumer Bankers Association found that personal sales calls are the most effective way to gain new small-business customers.

The 100 sales officers in BankAmerica's small-business unit target businesses with annual sales of $1 million to $10 million and good chances of eventually becoming corporate customers, Mr. Pearson said.

Faced with heavy competition from community banks, Mr. Pearson said, BankAmerica seeks to distinguish itself by offering a wider array of products and a designated relationship manager to provide the service that customers demand.

But that may not always be enough, community bankers say.

Kenneth A. Corsello, senior vice president and chief credit officer for Heritage Bank of Commerce in San Jose, Calif., said business customers tend to use several banks to meet their needs.

"BankAmerica is very competitive, but they can't wrap up every piece of the market," Mr. Corsello said. Entrepreneurs might use BankAmerica for a commercial real estate loan but Heritage for asset-based lending, which requires bankers to work closely with borrowers, he said.

And David Kalkbrenner, chief executive officer of Greater Bay Bancorp in Palo Alto, Calif., said BankAmerica still focuses on businesses that borrow less than $100,000 and interact mostly with branch employees.

But Mr. Pearson said that though referrals from branch employees used to provide most new business customers, they now bring in only 20%.

Most of his sales officers, who receive a base salary and commission, were hired from outside the bank, Mr. Pearson said. Many are former business owners, accountants, or veterans of specific industries. The bank plans to hire 25 more early in 1998, he said.

Each group of eight sales officers has a team leader who works with them to develop their sales skill and track their progress, he said.

"Our group only has one focus, and that is to understand the small- business customers," Mr. Pearson said. "We want to attack that market."

"Service is extremely important to these customers," he said. "If you are not there when their needs change or if it is not easy for them to get through to you, you will have problems."

Service was crucial to Thomas Nickell, comptroller for a Milpitas, Calif., company that makes computer circuit boards.

Mr. Nickell moved the company's real estate loans to BankAmerica. Later he moved its credit lines, checking accounts, and equipment loans-after BankAmerica hired the relationship manager who had handled his business for another bank. He declined to name that bank.

Four other banks have called Mr. Nickell since October, he said, but he doesn't plan to switch.

"You deal with people, not just the institution," he said. "We need to know that if we need to borrow money, the people who pick up the phone will be able to move quickly and meet our needs."

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