As large banks make deeper inroads into small-business lending, smaller competitors are feeling increased pressure to cut the time needed to make loan decisions.

Some of the largest small-business lenders, such as Fleet Financial Group, have begun using credit scoring. In an ad campaign last year, Fleet promised to make small-business lending decisions in 24 hours.

"It's been a tremendous success," said Norman DeLuca, managing director of Fleet's business and entrepreneurial services group. "What small- business owners want is the combination of speed and simplicity."

In January, People's Bank of Bridgeport, Conn., the lead subsidiary of People's Mutual Holdings, began offering a small-business overdraft line of credit and also promised to make a loan decision in 24 hours.

"We want people to know they can expect a quick response," said Carl Harris, first vice president at People's Bank.

Other bankers said they are feeling pressure to reduce the time customers wait for loan decisions. John VanWormer, president and chief executive officer of $750 million-asset First National Bank of the Hudson Valley in LaGrangeville, N.Y., said his bank will begin using credit scoring this spring.

"It's the only way we can compete," said Mr. VanWormer, whose bank battles Cleveland-based KeyCorp and Boston-based Fleet.

Trustmark Corp.'s $5.2 billion-asset bank in Jackson, Miss., set up a loan processing center in February and plans to use credit scoring to reduce the time it takes to make loans from three days to one.

"We want to be able to give our customers an answer as quickly as possible," said Robert B. Lampton, first vice president at Trustmark Bank.

Richard C. Hartnack, vice chairman of San Francisco-based Unionbancal Corp., an affiliate of Bank of Tokyo-Mitsubishi Ltd., said recently that technology can reduce lending time to 15 minutes from three days and lower the cost of originating a loan to $75 from about $1,000.

Fair, Isaac & Co., whose small-business credit scoring system was the first and is the most popular of it kind, said 275 banks now use it, up from 257 on Sept. 30, the end of its 1997 fiscal year.

Whitney Holding Corp., a $3.3 billion-asset bank company based in New Orleans, said it is forming a small-business loan processing center to reduce the time it takes to make new loans, according to Karl Zollinger, vice president at lead unit, Whitney National Bank.

"We've been lending to small businesses for over 100 years, but we've made it very difficult for them because of how we did the paperwork," Mr. Zolliger said. "We're going to make it easier."

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