Forget high-pressure sales pitches. When it comes to bringing small businesses in through the door, Chemical Banking Corp. has Frank Lourenso.
With 33 years of street-level expertise, Mr. Lourenso clearly understands his market.
"Sixty to seventy percent of small businesses pick their banks because they can walk to it or because the bank opens early," he says.
"And before they even get around to thinking about taking out a loan, they want to be able to make deposits, cash payroll checks, and get change for the cash register."
Only one out of 10 products small businesses need is credit- related, adds Mr. Lourenso, an executive vice president in charge of Chemical's middle-market banking group. The others include foreign exchange and 401(k).
Chemical is well positioned to track current trends. It is the top lender to small businesses in the New York area, with $2.14 billion in outstandings in 1993 - the most recent figure reported - ahead of Citicorp's $1.83 billion and Bank of New York Co.'s $1.38 billion.
Chemical's 1993 figure, based on reporting standards that were new and still vague at the time, was probably understated by 5% to 10%, said spokesman Ken Herz. The 1994 figure, including additional lending, will come in about 15% higher, he said.
Chemical defines small businesses as those with between $1 million and $10 million in annual sales. The bank prefers to measure the scope of its business dealings with small businesses using relationships, rather than credit, as the main criteria.
"Lending to smaller businesses has been part of a major thrust for them," said Charles B. Wendel, president of Financial Institutions Consulting Inc. "We expect them to continue to aggressively build market share, particularly in view of Citicorp's withdrawal from lending to much of the middle market in New York."
According to a survey by Roper Starch Worldwide Inc. of nearly 1,000 small businesses, Chemical does business with 43% of them.
The same survey found that 28% of those polled had a banking relationship with Citibank, 19% with Bank of New York, and 18% with Chase Manhattan Corp.
National Westminster Bank USA, Merrill Lynch & Co., European American Bank and Fleet Financial Group were the other leading contenders for small- business banking.
Figures aside, Mr. Lourenso is an enthusiastic promoter of small- business banking. "Most of the jobs in the country are created by small businesses," he observes. "New York has been slow to participate in the national recovery and the business community is still cautious, but we expect to see significant growth this year."
To keep pace with the competition and bring more customers in through the door, Chemical has got its own bag of tricks. That includes sending out pumpkins before Halloween to prospective customers with a promise to bring candy if they'll meet with a Chemical representative; pamphlets promising to disclose some "hot ideas" about banking accompanied by a package of Red Hots and Tabasco sauce, and chocolates on Valentine's Day.
"It's a very competitive market and the competition is mainly on pricing and terms of the loan," Mr. Lourenso says.
One of the more promising market segments, he adds, is the immigrant business community and trade-related small-business banking.
"Immigrants have been one of the positives for the outlook in New York," Mr. Lourenso says.
To develop business in this area, the bank employs Korean and Chinese- speaking staff in the Flushing section of Queens; Greek-speaking staff in the Astoria section of Queens; and Russian-speaking staff in the Bensonhurst section of Brooklyn. Chemical is also increasing the amount of business it does in trade-related services such as letters of credit.
"People realize they can source and sell overseas. And it's not all that big a deal," he says.