During his 25 years on Wall Street, Peter Gleysteen helped create today's massive market for syndicated corporate loans. Now, after four years as a consultant, Gleysteen, 54, hopes to get in at the start of another major financial innovation.

The former head of J.P. Morgan Chase's syndicated loan business has launched an investment firm, Commercial Industrial Finance Corp. The new company, a joint venture with Boston private equity firm Charlesbank Capital Partners, aims to profit from helping smaller companies issue syndicated loans.

Loans of less than $50 million usually can't be syndicated because there is virtually no secondary market for small loans, a fact that severely limits the appetites of institutional investors for this paper. Big banks that want to lend to small companies and spread the risk must bring in competitors -- often smaller, regional banks -- to help underwrite the loan. But that opens the possibility that the smaller banks will attempt to steal the middle-market clients from their big rivals.

CIFC will attempt to solve this problem for banks like J.P. Morgan, Bank of America and Wachovia by buying pieces of their small loans. Unlike a bank, however, CIFC won't try to win other business from the borrowers.

"The bank is the motorcycle and we're the sidecar," Gleysteen says. He spent several years developing the concept behind CIFC and now has $400 million to invest.

His new business could prove risky, though: The lack of a liquid secondary market for tiny loans means that CIFC may get stuck with bad debts. But Gleysteen is confident that his experience on the structuring and origination side will help CIFC avoid potential potholes. He also believes that in time these small loans will become attractive to other institutions. Until then he's prepared to be a pioneer once again.