First Union Corp. said it has updated its commercial sweep account to broaden its appeal to small-business owners.

As part of the transformation, the Charlotte, N.C., banking company changed the account's name from Commercial Cap to Cap for Business, according to Monica Powell, First Union senior vice president.

"The account truly is designed for small businesses, and we need to call it what it is," she said.

Ms. Powell said changing the name would eliminate the perception that the account was intended for corporate customers.

The Cap, or capital management, account automatically sweeps deposits above a set level from a checking account into an account that can be invested in stocks, bonds, or mutual funds. First Union offers similar accounts for consumers.

Nearly 88% of the 45 banking companies surveyed by the Consumer Bankers Association last year said they offered sweep accounts for small businesses or were planning to. Some of the larger companies included Fleet Financial Group of Boston, KeyCorp of Cleveland, and Wachovia Corp. of Winston-Salem, N.C.

Assets in all First Union Cap accounts have increased 18%, to $26.7 billion, since June 1997. The company now has 300,000 Cap accounts, up from 271,000 at mid-1997, but only 26,000 of them are business accounts.

"Given the level of effort they put into it and the huge customer base and geographic distribution they have, I would think more small-business owners would be interested in the account," said Les Dinkin, a consultant at Oliver Wyman & Co., New York.

Ms. Powell said the company plans to use direct mail, print advertisements, and Internet promotions this year to increase the number of business Cap accounts.

Last year it spent $85 million on advertising, more than double its 1996 spending, and launched a campaign boasting that the commercial account combined "the savvy of a Wall Street broker with the approachability of your local banker."

New features of the business Cap account include a revised statement, a wider selection of no-load mutual funds, and a telephone system for obtaining stock quotes. In addition, account holders can now make 250 free monthly deposits, up from 100.

First Union introduced its consumer Cap account in 1985 to compete against a cash management account offered by Merrill Lynch & Co. The company introduced its commercial Cap account in 1993.

Banks typically earn greater revenue from money in small-business checking accounts because they do not pay interest on those deposits. But they offer sweep accounts to help keep customers that might otherwise move their money to brokerage firms, Mr. Dinkin said.

The revised small-business account is part of the company's effort to gear its product to specific customer needs, said Martha Hayes, First Union senior vice president for small-business banking.

"It's really a marketing tool," she said. "We have to give customers ideas about effective ways to use the accounts."

The bank charges a $100 annual fee for the business Cap account, which requires a $20,000 balance. The fee covers the cost of credit and debit cards that come with the account.

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