At first glance, BayBanks' new Convenient Business Credit loan looks like any other small-business loan product.

But ask Joe Roller, managing director of small-business marketing at the Boston bank, and he'll say it is the result of changes that began nearly two years ago.

"We could see there was a level of credit - between $25,000 and $250,000 - that was not available for a large number of our customers and prospects," he said in a recent interview. "We also didn't think we were meeting these needs in a cost-effective way."

The product, designed for companies with annual sales of $500,000 to $10 million, requires a two-page application, personal financial summaries, two years' tax returns, and accountant-prepared financial statements.

The loans range in size from $10,000 to $250,000, and they come as either five-year term loans or one-year credit lines. Payments are automatically deducted from the customer's business checking account.

Setting up the system to be able to offer such a product required rethinking the way small-business loans were handled. The first step was establishing a small-business resource center to handle loan originations, approvals, and monitoring.

But the center couldn't operate without a credit scoring system. So in 1993, the bank allied itself with Dun & Bradstreet to design a system that allowed quick and efficient access to information. The result was a loan- processing workstation called Business Automated Scoring and Information System, or Basic.

"We can now do prospect prescreening so we can make better use of our salespeople," Mr. Roller said.

John Carusone, president of Bank Analysis Center Inc., Hartford, Conn., said BayBanks has a tradition of innovation in its retail business line. But this latest small-business product is probably the result of competition in New England, he said.

"In my view, this is the first of many competitive innovations launched in response to the Fleet Financial Group and Shawmut National Corp. merger," said Mr. Carusone, who follows New England banks. "I think they're anticipating some customer willingness to reexamine banking relationships, and they are positioning themselves with the right products to be more responsive."

Mr. Roller suggested that new products will probably keep coming, as feedback comes in from the bank's more than 200 branches, small-business sales people, and regional banking lenders.

"We think that, by waiting until we got the product right, that we've got a better product to sell," he said.

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