Magazine article American Banker

Amex, AT&T Capital Form Small-Business Lending Partnership

Magazine article American Banker

Amex, AT&T Capital Form Small-Business Lending Partnership

Article excerpt

American Express Co. has joined with AT&T Capital Corp. for its latest foray into small-business lending.

Through a joint venture called American Express CapitaFinance LLC, the companies will be offering equipment financing initially to the New York-based card issuer's 1.6 million small-business customers.

AT&T Capital, spun off last year by AT&T Corp. and already a major force in the small-business market, might later make other types of loans available through the joint venture, which plans to send out its first mail solicitations next week.

The $10 billion-asset AT&T Capital replaces Advanta Corp. as American Express' ally for financing office equipment, mainly because the former AT&T subsidiary is willing to make larger loans.

Augmenting its business card strategy, American Express is also approaching the small-business market cooperatively with banks. In September it began working with Banc One Corp. and Wells Fargo & Co. to offer $5,000 to $50,000 unsecured lines of credit which businesses can draw down by writing checks.

In the office equipment area, American Express CapitaFinance will typically provide financing after purchases are made on American Express cards. Card members would call AT&T Capital's customer service center to arrange terms.

American Express had been working with Advanta on an office equipment pilot since last March.

Among the differences between the two programs, Advanta capped leases during the pilot at $15,000, whereas AT&T Capital loans on purchased equipment will go up to $25,000, said Steven W. …

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