In 1998, banks plan to aggressively promote products that help small businesses manage their cash.

Some of the offerings include daily faxed statements of account balances, personal-computer banking services that automatically reconcile checks, payroll processing, and sweep accounts.

Such products have been offered to corporate customers for years, but are relatively new for small business, said Marc Scheuer, first vice president for small-business product management at Comerica Inc., Detroit.

Within the month, Comerica will be mailing offers for free debit cards, a telephone service that provides balance information, and automated teller machine cards, he said.

Using automated services will help Comerica reduce its costs. Mr. Scheuer said the automated telephone service would cost 35 cents per call, or $1.30 less than talking to a teller.

Banks are focusing on cash management products to increase the profits they generate from deposits, said Dale Kalika, vice president for small- business marketing at Firstar Corp., Milwaukee.

"There's an increased recognition that a large portion of the profits in small business come from the deposit side," Ms. Kalika said.

Deposits typically are more profitable than loans because banks do not pay interest on balances in small-business checking accounts.

Almost all small-business owners need deposit and cash management services, so the market for those products is broader. Only 35% of the 800 small-business owners surveyed recently by the National Federation of Independent Business said they borrowed regularly in 1997.

"We look at credit as a hook to get people in, but you've got a substantial part of the market that doesn't need credit," said James L. Rohrs, senior vice president and small-business product manager at Huntington Bancshares, Columbus, Ohio.

Mr. Rohrs said a third of the 400,000 direct mailings Huntington will send to small businesses in 1998 will promote cash management products. In 1997, the bank sent just 200,000 small-business mailings, all promoting its loan products. He said the bank is emphasizing a product that faxes account statements to small-business customers each morning.

"It offers a double benefit for us-we sell another product and the customers stop calling the branches to get their balances," he said.

H.F. Ahmanson & Co.'s Home Savings of America focused on credit products when it began targeting small businesses last year.

But Nadilee Russell, senior vice president and director of cash management, said customers were more interested in fax or PC services that gave them daily account balances.

"Small businesses are getting a lot more sophisticated in managing their finances and they are requiring these services," Ms. Russell said.

Home Savings began offering the balance-reporting services in November as part of a set of products that includes payroll and credit-card processing for businesses that buy several products.

The Irwindale, Calif., thrift plans to focus its marketing efforts on credit lines in the first quarter and promote the cash management products during the second quarter, Ms. Russell said. About 10% of the thrift's 30,000 small-business customers use the cash management products, she said.

Cash management products are especially important for customers with large account balances who might be attracted to nonbank competitors, said Les Dinkin, a director for Oliver, Wyman & Co., a New York consulting firm.

"They help retain customers that might go to a mutual fund company or Merrill Lynch," Mr. Dinkin said.

Maureen Konschnik, senior vice president and manager of business banking for First Maryland Bancorp, Baltimore, said cash management products play a key role in retaining customers after a merger.

First Maryland, which also plans to mail offers for its cash management products, is reviewing products offered by a bank it acquired last year to ensure they are priced properly for small-business customers.

"You can hold or gain a lot of market share by getting those products right," she said.

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