An Internet search using the keywords "small business loan" produces nearly half a million related Web sites. The odds of easily pinpointing a bank that's eager to make a loan matching the small business proprietor's geographic location, industry and loan size are discouragingly poor. But San Diego-based Lenders Interactive Services is hoping to trim the seemingly infinite possibilities and match customers with financial institutions. "What separates us from database search vehicles that you see on the Internet is we're more of a boutique, meaning we don't, and will never, have more than 1,000 lenders (on-line) at one time," says Len Merzel, the company's founder.

Potential borrowers enter their location, industry type, loan type and desired loan amount onto an interactive Web page. A list of lenders whose criteria meet the borrower's is produced, with contact information and hot links to Web sites. Currently 700 banks, mortgage companies, equipment leasing companies and other financial institutions of all sizes pay a flat fee-now set at $840-annually to be listed on the site. The price will increase as LIS nears its 1,000 institution cap, Merzel says.

Now customers take the initiative to contact the banks, but shortly customers will have the option of having their names and contact information forwarded to banks that match their needs.

First Savings Bank of Little Falls, NJ, a $175 million-asset community bank which specializes in small business loans, uses LIS as its primary tool for attracting borrowers to its Web site. First Savings president H.S. Kostakopoulos says that LIS levels the playing field between large and community banks. Between five and 10 percent of First Savings' loans have been LIS leads.


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