Citing exploding demand for financing from technology firms in the Southeast, California's Silicon Valley Bank has established a lending division in Atlanta.

The one-week-old unit targets emerging technology and life sciences firms. The Santa Clara, Calif., bank, which has specialized in financing fledgling technology firms since it was founded in 1982, is going after a market it says is underserved by the region's banks.

"To the uninitiated, this type of lending appears to be risky," said Tom Vertin, manager of the Southeast division. "But the perceived risk is higher than the real risk."

The bank, a subsidiary of $3.9 billion-asset Silicon Valley Bancshares, has operated small offices in the Southeast since 1996. They reported to the bank's East Coast head in Wellesley, Mass.

Under a new structure, Mr. Vertin reports directly to Silicon Valley president Ken Wilcox, eliminating a layer of decision-making. "We can marshal our resources better if we're reporting directly to the president," he said.

The Southeast division -- which includes an office in Reston, Va. -- will cover the area from Maryland to Florida and west to Mississippi. The bank is particularly bullish on Atlanta, North Carolina's Research Triangle, and the Washington, D.C., suburbs.

The District of Columbia area "is quickly becoming a high-tech hotbed, particularly for communications and Internet startup companies," said Mike Selfridge, manager of the Reston office. "Over 50% of the Internet backbone resides in this region, and about 50% of the nation's on-line subscribers are serviced in this region." Silicon Valley Bank is already expanding its business south of the Mason-Dixon Line. Three years ago it had fewer than 20 customers at its two Southeast offices, but now its Atlanta and Reston offices have 165 customers.

And if demand for venture capital in that region is any indication, the bank should have plenty of opportunity to finance emerging companies.

A report by PricewaterhouseCoopers says that southeastern companies got $1.9 billion of venture capital in 1998, up 75% since 1995, and that a vast majority of this money went to technology companies. This year emerging companies in Maryland, Virginia, the Carolinas, Georgia, Florida, Tennessee, Alabama, and the District of Columbia are on pace to get $2.4 billion from venture capitalists, the report says.

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