A Pennsylvania community bank has launched an equipment leasing program to keep its small-business customers from finding the service elsewhere.

William V. Freeman, Pennsylvania State Bank president and chief executive, said the $76 million-asset bank had to offer equipment leasing to round out the services it offers entrepreneurs. "We provide our small- business customers with every other conceivable financing product," he said. "We don't want our customers to get a lease from someone else."

Although a number of large banks have acquired leasing companies to offer this service to small-business customers, such services are less common at smaller banks.

Mr. Freeman said more than 85% of his bank's customers are small- business owners. Pennsylvania State will custom-design leases from $5,000 to $400,000 for commercial vehicles, office equipment, health care equipment, and computers.

"Nobody buys computers anymore," Mr. Freeman said. "They all want to lease them to turn them back in after two years and update their technology."

Donald J. Bonafede, who will head the leasing subsidiary for the Camp Hill bank, previously worked for the leasing subsidiary of Susquehanna Bancshares, Lititz, Pa.

Leasing has been viewed as a service entrepreneurs used before they could qualify for bank loans. But that changed in recent years as companies with strong brand names, such as AT&T Business Credit, lured customers from banks.

The portion of small businesses using leasing companies climbed from 19% in 1990 to 25% in 1996, according to a 1996 survey by Payment Systems Inc., Tampa.

In the last year, Mellon Bank Corp., First Union Corp., National Commerce Bancorp., and Centura Banks Inc. have all acquired small-business leasing companies.

Mr. Freeman said six other companies offer small-business leases in his market near Harrisburg, the state capital. But he said he isn't worried about leasing companies going after Pennsylvania State's customers because most won't custom-design leases for as little $5,000.

"We don't have a set menu of leasing product," he said. "If a customer needs something for a set period of time, we will find a way to fit their needs."

In addition, Mr. Freeman said, Pennsylvania State has found enough profit in serving smaller businesses that are overlooked by larger banks so that it isn't interested in equipment leases for large corporations.

"We're here for the crumbs," he said. "There are enough crumbs out there; it's just a question of finding the right crumbs to pick up."

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