Banc One Corp., Columbus, Ohio, has teamed up with American Express Co. to test market a preapproved line of credit for small businesses.

For at least three months, the bank company's Dayton, Ohio, unit has used American Express customer data to identify prospects and solicit them by mail.

The project is a potentially formidable combination between two of the most sophisticated marketers of financial services. It is one of the few times American Express has worked in direct cooperation with a commercial bank.

Ohio competitors, already battling nonbanks like Merrill Lynch & Co. and out-of-state banks like Wells Fargo & Co., are nervous.

"They're getting to my customers," said a rival Ohio banker. "And for me to see it means there's a lot more of it out there."

American Express and officials of Bank One, Dayton, would not comment on details of the pilot program.

"It's still in the early stages," said Kevin S. Sanford, assistant vice president of sales and marketing for the Dayton bank. "Who knows what's going to happen?"

John Russell, chief communications officer for $90.5 billion-asset Banc One, said the product is just one of many the company is testing, including other preapproved credit lines.

Officials of the two companies wouldn't discuss who does what in the program. But Nancy Muller, vice president of public affairs for American Express, said the bank has been targeting holders of the company's small- business card.

"It's our customer base," she said.

American Express has 1.5 million small-business accounts.

"This is very interesting," said Les Dinkin, managing principal of NBW Consulting Group, Westport, Conn. "American Express has been very proprietary about the use of their brand name."

Another industry observer noted that the two financial heavyweights have had close relationships in the past. For example, the card company uses Banc One's Triumph processing software. The latest joint effort fits into that history.

"American Express has been trying to find things to do with its small- business data base," the consultant said.

Officials of Bank One and American Express would not comment on the size of the credit lines nor on any other pertinent product data. But according to correspondence obtained by American Banker, one entrepreneur got a $15,000 line of credit with a 15.5% annual percentage rate and a $95 annual fee.

The mailings' distribution was kept secret, but the Dayton bank has a reputation for aggressiveness within Banc One. For instance, an executive of a different bank within the holding company said a customer of his in Georgia once received a solicitation for a different credit line product from the Dayton bank.

Whether the line of credit ultimately becomes a full-fledged part of Banc One's product line remains to be seen. But Charles Wendel, president of New York-based Financial Institutions Consulting, said the product is the wave of the future as more banks use data bases and credit scoring technology to locate prospects.

"It lowers costs to sell that way," Mr. Wendel said. "A lot of this is taking credit card technology and applying it to small business."

"Banks now are able to go through their data bases and cut them and look at them in different ways," Mr. Wendel said.

Banks that offer preapproved products to their customers review demand deposit accounts, Mr. Wendel said. To find noncustomer prospects, banks scour data bases from vendors to businesses with desirable borrower characteristics.

Banks have been offering preapproved credit products by mail to small businesses for two to three years, Mr. Wendel said. Wells Fargo & Co., with its much-heralded nationwide effort, is the industry's clear leader.

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