New Jersey's Valley National Bank is expanding its Small Business Administration lending program into Delaware and Maryland.

The $4.6 billion-asset bank received SBA permission last month to expand its preferred lender program and go head to head with nonbank lenders in the neighboring states.

Valley's expansion comes as AT&T Small Business Lending Corp., Money Store Inc., and other nonbank lenders, which have lower cost structures and less regulation, have taken the lead in SBA lending.

"There are other large lenders, namely the Money Store, that have gone nationwide, and we'll just offer another alternative," said Alan D. Lipsky, Valley first senior vice president for commercial lending.

Wayne-based Valley, which has 80 branches in New Jersey, is one of the few banks enlarging its SBA loan program outside its geographic market. Mr. Lipsky said the Middle Atlantic states could be a springboard for growth.

"We will consider logical expansions as we look at other markets," he said.

Valley plans to put at least one lending officer in Delaware and Maryland each. The lenders work out of small production offices, rather than full-service bank branches, but all the loans are processed through a centralized servicing office.

Preferred lenders can approve SBA-guaranteed loans without agency approval, which decreases the response time on a loan application.

The bank can usually respond to a completed SBA loan application within three days.

This year, Valley has approved 147 SBA loans in New Jersey for $33.7 million and several loans in New York and Pennsylvania, two states where it became a preferred lender last year.

"We expect to do a lot of business in each of these areas in the near future," Mr. Lipsky said.

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