Bank loan marketing targets small business in a big way.

As financial institutions in L.A. scramble to put their lending dollars to work, many are turning to what they consider one of the last frontiers of business banking: the small business.

In fact, the focus on small business lending began about two years ago, and nearly every major financial institution in L.A. now has a unit devoted to small business.

What has changed are the variety of new business products on the market and the lengths to which banks and thrifts will go to extend loans and lines of credit to small businesses. Most of L.A.'s major lenders are currently engaged in some form of ad campaign aimed at small businesses, and many are resorting to direct mail, cold calls, seminars and even personal visits.

When it comes to small business, most banking officials emphasize there are no particular industries or lines of business they are seeking. The only important factor is a firm's annual sales, which typically range from $500,000 to $5 million, and its perceived ability to repay loans. With regards to loan size, banks usually define small business loans as those ranging from $2,000 to $500,000.

One of the most aggressive players on the small business front is California's biggest bank, Bank of America. Last April, BofA announced that it plans to lend $10.6 billion to small businesses in 10 states over the next three years, including a $1.4 billion commitment to L.A. County. Since that time, the bank has embarked on an all-out marketing blitzkrieg.

"We put out a major advertising campaign beginning in April, which included radio, TV, billboards and print. We've never done that much advertising on small business before," said Jerry Bowman, executive vice president of the BofA business banking division in Pasadena.

But the marketing blitz didn't stop there. While it was bombarding small businesses with ads in the media, BofA also launched a more personal campaign to recruit small firms to its lending program.

"All the (BofA) branches did a blitz (door-to-door) campaign. They literally went out into the community to tell people about their commitment to small business," said Bowman, adding that all branch personnel, from tellers to loan officers to supervisors, took part in the personal visiting campaign.

BofA bank personnel visited 44,000 L.A. County small businesses and 143,000 California firms total in the first two weeks of April.

The results were substantial. Following the campaign, BofA's small business loan applications statewide went from 350 per day to more than 1,000. Bowman said the campaign will continue for the rest of this year, with faxing, direct mail and phone calls being added to dram up more businesses.

Marketing campaigns like BofA's are becoming more common, but underlying each campaign is a range of new banking products specifically designed to win over the small business borrower. Most new products use streamlined applications to make credit lines and loans easier for small businesses to obtain.

One of BofA's newest products lets small business owners sign up for credit lines of up to $50,000 with only a simple application and no financial statements.

But in the war for the simplest credit line, Sanwa Bank of California has trumped BofA, having just rolled out its own pre-approved credit line program on August 1. Under the new Sanwa program, certain small business are receiving unsolicited applications in the mail for pre-approved credit lines of up to $50,000, much like consumers now receive pre-approved direct mail applications for credit cards.

"We're mailing out (pre-approved applications) to prospects within a 10 to 15 mile radius of our offices," said Sanwa Executive Vice President Doug Stewart.

He explained that Sanwa extensively researched each of the firms that will receive the pre-approved credit lines. Following that research, the bank compiled a list of creditworthy candidates for the program and plans to mail out about 100,000 applications by year-end in a direct mail campaign.

"We've been working very diligently the last two and a half years to get a good slate of products for small business. This (latest marketing blitz) is a bringing-it-all-together campaign," said Stewart.

While big statewide banks like Sanwa and BofA are making bullish moves on small business, some of L.A.'s larger local banks are also vying for a piece of the action.

City National Bank of Beverly Hills kicked off its own marketing blitz earlier this year, which specifically targets small businesses. The new campaign is aimed at capitalizing on City National's new status as the largest bank based in L.A., following the acquisition of former No. 1 First Interstate Bancorp by San Francisco-based Wells Fargo & Co. on April 1.

"We've just started a new ad campaign attempting to add some dimension to our claim of being the largest bank headquartered in Southern California," said George Winston, senior vice president and director of marketing for City National.

City National's current campaign includes a combination of advertising, direct mail, seminars and telemarketing, all designed to lure in new small business customers.

"We're making a concerted effort to increase our number of key (business) customers by 50 percent over the next two and a half years. We kicked off the program in February, and are already a third of the way to meeting our goal," said Winston.