When the financial shock of the pandemic hit home, small business owners struggled to get loans from big banks.
"If you look at where their customers are, they weren't focused on the Tri-Cities and this region," says Will Barrett, president, and CEO of Kingsport-based Bank of Tennessee, explaining the mindset of the big national banks. when prioritizing loans.
"They don't go through the clothing store or the restaurant or the gas station, but we did, and we saw the effect it was having on the community."
It was community banks like Bank of Tennessee that came to the rescue, Barrett says, helping those local businesses get the cash they needed to stay afloat during a time of closures and widespread fear.
When Congress created a program that promised small business loans that would eventually become grants to those who qualified, Bank of Tennessee and its roughly 275 employees jumped into action, he says, many working at 2 a.m. and working all night to get those loans. for small businesses in the Tri-Cities.
“Reviewing what we were able to accomplish and the schedule, it really made us proud to be bankers,” Barrett says.
The challenge with the loan program was that when it started, it required a very manual process, he says. It took time to make the process more automated. Until then, he just had to deal with mountains of paperwork and try to get loans through a government website that doesn't always work, not knowing how quickly the money would run out.
The effort paid off, he says, both in terms of much-needed money and helping people navigate the uncertainties the situation presented.
“There was a lot of work that was done beyond money, and that was a lot of consulting, advice, and counseling during the pandemic,” says Barrett.
“Because we live here and know these businesses, we could help advise them well beyond what the PPP [Paycheck Protection Program] numbers reflect, and that is hours and hours spent on each business. Overall, through the program, I think we got about 1,700 loans for $143 million. And if you look at the number of jobs that they supported, it was close to 20,000.”
“If you look at the region, that was a huge impact just from our services at Bank of Tennessee,” he says, “and I would say, combined with the other community banks in the region, it's really making a difference.”
Barrett says this success in helping local Tri-Cities businesses during the pandemic downturn, at a time when many large banks were not prioritizing small customers, is an example of the difference between banks that are based in a local community and those based elsewhere.
“Small businesses make our entire region prosper, and if you look at our employer base, the vast majority are small businesses. I love the big businesses we have in the region, but the heart and soul of this area are the small businesses,” says Barrett.
“We go to church with the owners, we see them in the supermarket, we have coffee with them, and that is something that personally, as a community bank, our success is linked to their success in the region and the communities.”
According to the trade association that represents America's small community banks, Independent Community Bankers of America, community banks provide about 75 percent of all small business loans nationwide.
Even though it has grown to about 275 employees spread throughout Northeast Tennessee, Barrett says he still considers Bank of Tennessee to be a small business; in the decades since its founding, it has grown along with the region.
“We know the trials and tribulations that small businesses go through, so we can appreciate that,” he says, “and as a community bank, we reinvest in the community.”
Founder William B. Greene Jr. says that while the trend of mergers and acquisitions has had a huge influence on the banking landscape nationally: 85 percent of US banking assets belong to just nine banks, and the nation has a total of just 4,000 banks, down from 17,000 in 1990 — community banks will always be involved in the economy. Why? Because they take care of the little one.
"We've been doing it for [nearly] 50 years, and we're getting better at it," says Greene. "That's our bread and butter: It's a small business and the small individual customer who wants personalized attention."