First Union Corp. will not lay off any of Money Store's Small Business Administration lending officers as a result of its planned acquisition of the finance company, a bank spokeswoman said.

Money Store's SBA division will operate as an independent subsidiary of First Union at least until 1999, said First Union's Arati Sontakay.

But First Union may lay off some SBA lenders at Philadelphia-based CoreStates Financial Corp., which it plans to acquire by April 30, Ms. Sontakay said.

First Union last week named Pamela Davis, CoreStates' SBA lending manager, to oversee its activities in this speciality. She will report to Jane Henderson, a First Union senior vice president and director of community reinvestment.

Charlotte, N.C.-based First Union was not active in SBA lending until 1995, when it acquired First Fidelity Bancorp., one of the largest lenders in Pennsylvania, Delaware, New Jersey, and Connecticut.

The acquisition of Money Store, which makes SBA loans nationwide, would vault First Union into the top rank among SBA lenders, a distinction Money Store has held for 15 years.

Money Store originated $764 million of loans through the SBA's 7(a) program during the federal agency's fiscal year that ended Sept. 30.

CoreStates, which is an active SBA lender in its Northeast markets, originated $50 million, and First Union originated $33.5 million during the same period.

Bankers have long complained about the paperwork required for SBA loans, but large banks have stepped up their SBA lending in recent years to serve businesses that do not qualify for conventional loans.

Banks primarily make SBA loans to retail customers, but Money Store and other nonbank lenders gather referrals from real estate and business brokers and franchise businesses.

Charles Wendel, president of Financial Institutions Consulting in New York, predicted that First Union would eventually eliminate CoreStates' SBA loan processing and underwriting staff.

"In all likelihood those activities would be collapsed into the Money Store," he said. "First Union would be foolish not to take advantage of those cost savings."

As part of the CoreStates deal, First Union announced plans to cut 7,480 jobs but add 3,075 new ones in the Northeast. It has not determined which jobs will be affected, Ms. Sontakay said.

Richard Bove, an analyst at Raymond James & Associates in St. Petersburg, Fla., said First Union is likely to keep CoreStates' SBA lenders to help the bank build volume.

A primary benefit of SBA lending, Mr. Bove said, is that it could supply a steady stream of loans for First Union's capital markets group to securitize.

Nonbank lenders such as Money Store typically securitize the government- guaranteed and nonguaranteed portions of their SBA loans, but most banks hold their loans in portfolio.

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