Brothers Andy Nelson, left, and Charlie Nelson were able to finance their new company, Nelson’s Green Brier Distillery, with Tennessee Bank & Trust after being turned down by larger institutions.

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When Andy and Charlie Nelson were looking for a small business loan to help finance their new company, Nelson’s Green Brier Distillery, they were turned down by large national banks, including SunTrust and Bank of America.

Then they got a lucky break in the form of a phone call.

The call came from Roddy Story, executive VP and manager of commercial lending at Tennessee Bank & Trust, a small community bank with branches in Cool Springs and Green Hills.

Story, who had heard the brothers’ story about wanting to resurrect the family’s circa 1909 distillery business when he as a vice president at Bank of Nashville. That bank decided against loaning the Nelsons money, but Story, at a new bank, just couldn’t get the Nelson brothers out of his mind. He thought they had the character, vision and work ethic to succeed that some tweaking and adjusting could make a loan viable.

(Editor's note: The original version of this story stated in the paragraph above that Story had worked for Nashville Bank & Trust instead of Bank of Nashville. The Nashville Ledger regrets the error and is happy to set the record straight.)

“All the banks said a start-up was just too risky,” says Charlie Nelson, 28. “They didn’t think we had enough business experience. It felt like they saw us as a number. Roddy saw us as real people he believed in.”

Story says he doesn’t feel like a knight in shining armor because he still has to say no to the majority of businesses to come to him for loans. He says today’s banks – whether they be national, regional or community institutions – are operating under tight guidelines for lending money.

“The wounds are still fresh from the recession,” Story says. “No matter what you do you can’t get outside the laws of lending. There are no heroes in lending.”

Regardless, Tennessee Bank & Trust and Story are a pretty big deal to Charlie and Andy Nelson.

“It’s remarkable that they take such a genuine interest in what we are doing,” Charlie says.

Why are small, locally-owned-and-operated banks sometimes able to be more flexible than bigger banks when it comes to commercial loans, especially when those loans are little outside-of-the-box?

Ron Samuels, chairman and CEO of Avenue Bank, a five-year-old Nashville-based community bank, says one reason is that most have corporate boards chock full of local entrepreneurs and professionals who act as ambassador, especially in their specific areas of expertise.

Avenue’s local board has influential leaders in music, publishing, health care, commercial real estate and non-profits, all areas in which the bank has carved out a specialty niche.

“It’s a huge advantage to have these close relationships with local decision makers,” Samuels says. “If you live and work in your market you know what’s going on it’s a lot easier to make borderline calls.

“The bigger banks use models and grids to make decisions,” Samuels add. “We don’t have to. We know the people and the management [of the businesses seeking loans].”

Duane Olive, chief financial officer of Clarksville-based F&M Bank, says forging close personal relationships are one of the main ways small banks compete with the big banking juggernauts since they usually can’t match interest rates. Many of those bonds are forged via board members, he adds.

“We work with local business people and draw from what they are seeing in the community,” he says. “We are able to make high-quality loans, not because we have less strict underwriting criteria (than bigger banks), but because we are willing to get to know our customers’ businesses at a granular level. This is where we have an advantage.”

Jim Rieniets, president and CEO of Nashville-based INSBANK, agrees.

“Your board members are a great resource in making local decisions,” Rienients says. “They are your raving fans and promoters.”

Rienients says it’s not unusual for the bank to land a commercial client because of a board member. For example, when he mentioned the recent addition of David Crabtree of Brookside Properties to a prospect recently, Crabtree’s involvement with the bank, reputation and expertise became a main selling point.

Avenue Bank board member and former chairman of Song Music Nashville, Joe Galante, says he decided to join the board because his music industry colleagues were crying out for more services.

“They want to know the decisions are made here,” Galante says. “I have been here since 1974. You meet a lot of people over that time and you know the various connections that have been formed in the music industry. That institutional knowledge helps us serve the industry.

But localized boards aren’t the only way to go. Tennessee Bank & Trust directs its bankers forge deep local ties with local customers and businesses.

“We’re small and don’t even have a board,” Story says. “We don’t send things to a credit committee; we use a signature system (that allows the designated banker to sign off on the loan). Our lending policies are directional but give the latitude to the banker. We’re happy to land three of four marquee accounts a year; we don’t have to have 20.”

Keith Newcomb, CEO of Full Life Financial, a local financial planning firm, says consumers shouldn’t assume it’s easier to work with a community bank than a big bank.

“The community bank does sometimes have the ability and resources in terms of time and focus,” he says. “But it’s hard to get a loan, period, and once you have a loan there’s always the possibility bank regulators will tell a bank to pull back or change their policies. There’s the possibility the banker will leave the bank, and the relationship and terms could change. “

Story agrees, and recommends that loan recipients get to know several people at a bank in case of a turnover.

“Get to know everyone at the bank to the extent you can,” he says. “They may be involved with the loan at some point.”