Citicorp, following the lead of Wells Fargo & Co., is quietly preparing to offer preapproved loans to small businesses in many states.

Sources familiar with the effort said the New York-based giant plans to blanket businesses in an unspecified number of states this fall with direct-mail offers of unsecured credit lines.

The move comes as many major lenders are mapping out ways to respond to a nationwide direct-mail effort by Wells. Last year, the San Francisco company startled the industry by offering preapproved loans of up to $25,000 to small businesses in all 50 states. The program now offers some businesses up to $50,000 and is experimenting with larger loans.

"People feel threatened by what Wells is doing," said one observer.

The Citicorp plan, like Wells', will rely heavily on computer-based credit scoring to identify prospects, the sources said. Proponents say this technology minimizes the risks of such aggressive loan marketing.

A Citicorp spokeswoman would only confirm that the bank is considering expansion of a small-business loan program that now targets customers in the New York area.

"We are looking at broadening that offering, but because our plans are still being evaluated, I can't go beyond that," said Maria Mendler, the spokeswoman.

While no other big lender has yet followed Wells, consultants say that virtually all the large small-business lenders are considering such plans.

For example, Barnett Banks Inc., Jacksonville, Fla., plans to offer preapproved lines to businesses in its Georgia and Florida markets by next year. After that it might reach to businesses outside its traditional markets.

Sources said Citicorp originally intended to launch its direct-mail effort during the current quarter. But a host of organizational and risk management issues have delayed the launching.

Citi's credit specialists are painstakingly reviewing data base management and credit scoring processes needed to get the project off the ground, sources said.

"There's a very conservative culture in the Citicorp credit area," said one observer. "They don't have the same risk appetite that Wells does. Citi has been burned before, and they're nervous about getting burned again."

Added another source: "This is risky, and they have to take time to get their arms around it. They're going over things five times, but I wouldn't say there is resistance."

Meanwhile, Citicorp is contending with such organizational issues as picking the processing centers to use for handling applications, sources said.

"There's more to this than just mailing out prequalified offers when you get into it," an observer said.

Citicorp, however, is hardly a newcomer when it comes to prequalified credit line solicitations of small businesses. Its northeastern competitors have seen it solicit by direct mail in the past.

A July 1994 Citi letter offered existing small-business customers preapproved, $25,000 credit lines, according to bank correspondence. The check-accessible product, called Business Ready Credit, was priced at one percentage point more than the prime rate for the first year, although business checking balances would affect later interest rates.

A February 1995 letter, moreover, was clearly targeted at companies that had financial relationships with other banks.

The letter said the target customer was prepproved for a $15,000 credit line if it opened a $5,000 business checking account.

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