Wells Fargo & Co. is stepping up its year-old nationwide effort to sell prequalified lines of credit to small businesses through direct mail and telemarketing.

Besides increasing the number of solicitations, the San Francisco-based bank is diversifying its product offerings, according to Wells senior vice president Lucy Reid.

"We will be making more calls in 1996 than in 1995," Ms. Reid said. "We're going to be experimenting with different sizes, different offers, different pricing, and different risk-based pricing."

The bank aimed letters at all potential prospects, but only dialed businesses that, according to predictive models, were likely to respond and be approved, Ms. Reid said.

Businesses, generally with annual sales of $2 million or less, were identified through a combination of data base analysis and credit scoring.

The initial credit limit was $25,000, but Wells is now testing lines larger than $50,000, Ms. Reid said.

Analysts expect other banks to follow Wells' lead.

Wells' effort has "been quite successful so far," said Raphael Soifer, a bank stock analyst with New York-based Brown Brothers Harriman & Co. "I expect that it will spread."

Last year, Fleet Financial Group, Boston, started selling preapproved and prequalified lines of credit to businesses in its market. BankAmerica Corp., San Francisco, plans to join the fray in its 10-state market later this year.

Filomena Soyster, director of business banking for Fleet, likened the use of direct mail for business credit lines to credit card promotions. "We're using consumer techniques for our business customers," she said.

Barnett Banks plans to offer preapproved and prequalified credit in its Georgia and Florida markets through direct mail and telemarketing later this year, said Steven D. Hickman, director of small-business banking for the Jacksonville, Fla., company. But it might not stop there.

"We might expand beyond our Florida and Georgia markets but I want to understand the risks of that," Mr. Hickman said.

Robert Visini, vice president of business bank marketing for Bank of America, said the California giant would stick to a similar learning period before it considers going outside its turf. "You don't go off half-cocked," he said.

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