Zions Bancorp. in Salt Lake City is well on its way becoming a nationwide small-business lender - a major strategic goal.

Zions Small Business Finance, a St. Louis-based division of Zions Bank, last month received preferred-lender status from the Small Business Administration for 16 metropolitan areas nationwide. That brings the number of cities served to 36, in 17 states.

The $6.2 billion holding company handles SBA-guaranteed small-business lending through other divisions in three more states: Arizona, Nevada, and Utah.

Anthony J. Feraro, who built the guaranteed lending unit from scratch and is its senior vice president, said Zions wants to have a national presence by late next year.

"We want to hit every SBA district within 15 months," said Mr. Feraro, who joined the company in April 1995. "I think we're going to be one of the largest and best servicers to small business in the country."

James M. Marks, a San Francisco-based analyst for Sutro & Co., said Zions' move into small business was smart.

"It think it's a fantastic idea," Mr. Marks said. "This is the way I see banks being able to best leverage their franchises: by picking a niche that they're good at and they're comfortable in, and taking it beyond their geographic boundaries."

Mr. Feraro's goal is to repeat his experience at ITT Corp., where he created a small-business lending subsidiary in 1982.

He managed ITT Small Business Finance until March 31, 1995, when it was sold to General Electric. The unit was then the second-largest SBA lender, with a servicing portfolio of $700 million.

Starting a guaranteed-lending unit is easier the second time around, Mr. Feraro said.

"You learn from your mistakes, and you know the SBA players better, and you see what they really want," he said. "Each SBA office has its quirks, and you have to honor those."

Zions Small Business Finance has a long way to go before it reaches ITT proportions. Its portfolio stands at $36 million - a figure Mr. Feraro called small but reasonable considering that the division has been actively lending for only a year.

To boost the volume, Mr. Feraro intends to hire 20 new lenders - for a total of 30 - by the end of next year.

"We can lend $120 million a year with a staff that size," he said.

Although salespeople are based around the country, servicing and processing are handled in St. Louis.

Zions offers a range of SBA-backed loan products, and for the past six months has participated in a business and industrial guaranteed-loan program back by the Agriculture Department.

The company plans to augment its arsenal by getting involved in state- level guaranteed lending programs - within six months, Mr. Feraro said.

The Zions executive had been a banker for 16 years before he joined ITT back in 1982. He's happy to be back in the bankers' fold for a couple reasons, he said.

For one thing, nonbanks are barred from participating in the Agriculture Department program, he noted. said. Also, Mr. Feraro said, the bank culture is more livable.

"It isn't a factory atmosphere," he said. "There's a push, but it's a reasonable push."

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