SACRAMENTO, Calif. -- Nobody ever accused Marc Turtletaub of thinking small.

With his company, the Money Store, already the top Small Business Administration lender nationally and a significant originator of student loans and second mortgages, Mr. Turtletaub could focus on years of double-digit growth in those three lines alone.

But as he conducts a walking tour of the company's cannery-turned-headquarters in this Northern California city, Mr. Turtletaub makes it clear that he is far from satisfied. Indeed, he sees the day when his company is an umbrella of high-growth niche businesses.

Ready to Take a Risk

"I want us to be like General Electric Capital," the chief executive officer says matter-of-factly.

If that sounds ambitious, you have to understand the ready-aim-fire nature of Mr. Turtletaub and his company's track record of building niches into nationwide businesses. Its three decades of profitability have often been at the expense of banks who saw a business like home equity lending as too risky.

Now, those same banks realize second mortgages are too profitable to ignore.

The company's success is a convergence of marketing genius (Hall of Fame baseballer Jim Palmer is their TV pitch man), technology, specialized Zed underwriting, and customer service.

'Rapport with the Consumer'

"They have had 25 years of building a rapport with the consumer," said Jeffrey C. Villwock, an analyst at New Orleans-based Johnson Rice & Co. "The greatest risk the Money Store faces is that banks will finally wake up and figure out that customer service is where it's at.

"But," he says, laughing, "I don't think there's a whole lot of chance they're going to do that."

The Money Store has succeeded by going where banks - and few others - were willing to venture. The company was started in 1967 after founder Alan Turtletaub read newspaper articles about a scandal in the fledgling second mortgage business in his home state of New Jersey. He saw opportunities where others saw hassles.

The eider Mr. Turtletaub, who remains chairman of the company, sat down at the dining room table and outlined a strategic plan that his son, Marc, still uses to build the business. The objective: Target underserved markets where there is a perceived high risk but generous margins for those who can master the business.

True to Its Philosophy

"The company has not truly deviated from where we started," said the senior Mr. Turtletaub in an interview from the Union, N.J., office where the company's financial operations are based.

By targeting the second mortgage business at a time when New Jersey banks would not go near such loans, the Money Store soon dominated the business at home before expanding nationally over the next three decades.

Last year, the company originated $1.12 billion of home equity loans, targeting mostly 'B' credits that banks wouldn't touch.

By the early 1980s, the company was looking for new opportunities. The Money Store soon targeted student loans and lending under the document-intensive SBA program.

Moving in on Students

While banks have always been aggressive providers of student loans, the Money Store sensed opportunity. By the time Educaid, the company's student loan subsidiary, opened its doors, the field was heavily crowded in what had become a fill-in-the-blanks commodity loan business.

The younger Mr. Turtletaub recalls how Educaid got its start as a lender at UCLA, the giant state school that California banks aggressively pursue.

"I asked them what the most difficult loans were, the ones that no one else would do," he recalled. "They said no one would touch the loans of their foreign students because there was too much extra paperwork involved. I said, 'Ah, it just so happens that we have someone who specializes in those kinds of loans. We didn't really, but we soon did.'"

Once Educaid had made its mark in foreign student loans, he says, it moved on to the dental school. "Everybody wanted to make loans to medical students but not the dental school," Mr. Turtletaub said. "We did such a good job for them that the medical school called us and asked if we could come over."

Finding Low Defaulters

Today, the company has a nationwide business which analysts say focuses largely on four-year colleges and professional schools, where the default rate is lowest. In 1993, the Money Store originated $252 million of student loans. Mr. Turtletaub sees a bright future as many banks pull out of the business because the federal government will enter direct lending this fall.

But the area where banks have most recently encountered the Money Store is small-business loans. During the 1980s, the company grew into the leading SBA-guaranteed lender, with $319 million of loans originated last year alone.

While many banks spurn such loans because of their phonebook-sized piles of paperwork, the Money Store computerized the process and focused exclusively on lending to buyers of owner-occupied businesses, such as doctors.

Today, the company is making working capital loans, which has been a traditional domain of banks. But the banks are starting to fight back. Many commercial lenders are pushing into SBA programs and aggressively courting small businesses. Another major entrant in the SBA area is AT&T Capital Corp.

"All the things we are in are becoming more and more competitive," said Mr. Turtletaub. "Yesterday's niche is everybody's product today."

Baird Blake, a portfolio manager at Conseco Capital Management in Indianapolis, said the company not only uses heavy marketing and 800 phone lines but also benefits from having people in local markets who have built small-business lending.

"They have a head start in that business," he said.

The Money Store has offices with local lenders in most major metropolitan markets and just over half the states. That has given its $1.3 billion portfolio of small-business loans a geographic diversity after once being heavily weighted toward recession-plagued California.

"An 800 number won't help you much on small-business loans," said Debra Dalman, banking analyst at Daiwa Institute of Research America Inc. "They've been nurturing that business for years, and having local people is a part of their success."

Mr. Turtletaub concedes that local offices may add to overhead, but the tradeoff is better relationships and a higher level of intelligence about opportunities in those markets. "There is more brick and mortar here than you might think," he said.

Credit approval is still centralized. With the latest customized technology, the company is able to track loans at each office and follow everything from how well the branch's marketing campaign is doing to its daily workload.

While the company is not likely to back away from competition, it has put more emphasis in recent years on product diversification and exploring new opportunities. Where the home equity business may have offered only a fixed-rate product before, it offers a flexible mix today.

"They have spent the last three years really refining what it is they do," said an institutional investor in the company who asked not to be identified. "That has helped generate some internal growth from existing business, and it has shown them some new opportunities."

Analysts and investors say that new areas the company moves into will likely be extensions of existing businesses, which few others compete for. "Whatever they do, they'll do it cautiously," said Ms. Dalman.

Most expect the company to market federal Title I home-improvement loans by making financing available through reputable contractors. "It is an extension of their home equity expertise," said Johnson Rice's Mr. Villwock.

Still, Mr. Turtletaub is circumspect about specific opportunities. While he wants to be as varied as GE Capital, he makes it clear that he has no intention of following the cradle-to-grave approach of many banks.

"We want to be more diversified," he said, "but we're not running hell bent to be full-service."

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