First Union Corp. is sharpening its focus on government guaranteed small-business lending in the Northeast even as its focus on that activity fades in the Southeast.

Last month the Small Business Administration named the North Carolina company a preferred lender in six northeastern states. There the bank, not the agency, will be making the credit decisions on its own SBA lending.

That will allow the country's sixth-largest bank to offer faster turnaround times to companies seeking a guaranteed loan, said Henry Fierst. Mr. Fierst, based in Woodbury, N.J., manages the bank's SBA program in the six states: Connecticut, Delaware, Maryland, New Jersey, New York, and Pennsylvania

"It's a competitive issue," he said.

The Charlotte-based bank had been working toward preferred-lender status for two years.

But though Mr. Fierst is bullish on the program, it has been of fading importance in First Union's southeastern markets for the past two years, said Leila Sackett, vice president of the bank's small-business banking division.

The reason: Since 1994 the bank has worked toward making on its own small-business loans that once would have been guaranteed, she said.

"The need to have a dedicated effort to SBA loans has been minimized," she said. But she added that there is still a need farther north.

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