A Baltimore restaurateur recently found the best loan to finance his new Australian-themed restaurant from an unlikely lender, a thrift that has been averaging one business loan a year.

Mark Haddad, co-owner of the Boomerang Pub, which is to open in two weeks, had shopped for his $250,000 term loan at a community thrift, a community bank, a regional, and a superregional. Three of the four said "yes," but Mr. Haddad said $55 million-asset Bay-Vanguard Federal Savings Bank offered the best deal. He said he negotiated fees and points.

"They are a small bank and a conservative bank," Mr. Haddad said, "but they can see the restaurant is going to be successful."

The deal is a rarity in small-business financing. Banks traditionally shun start-ups, especially start-up restaurants and retail stores, which are vulnerable to consumer whim. Thrifts traditionally are not competitive in small-business lending.

But Bay-Vanguard president Carolyn Mroz said she wants to make more small-business loans to diversify from the thrift's core of residential mortgage lending.

The Baltimore thrift recently introduced a flat-fee business checking account, and it offers a 9.5% interest rate on business loans. Ms. Mroz said she plans to serve businesses owned by existing customers, rather than marketing to new ones.

"We're a small bank, and we want to serve the needs of the customers in our community," Ms. Mroz said. "We're not trying to go out and compete with the big banks."

Bay-Vanguard's approach differs from that of much larger thrifts. In recent years, thrifts such as New York's Dime Savings Bank and California's Glendale Federal Savings Bank have formed small-business divisions to battle the regional banks.

But Mr. Haddad said the large banks with offices in Baltimore aren't competitive with Bay-Vanguard, which offered him a 15-year loan with a five-year balloon payment.

"The bigger banks just didn't take the time, and they had the worst packages by far," he said.

Bay-Vanguard vice president Michele Kelly, who worked on Mr. Haddad's loan, said knowledge of the city helped her evaluate the start-up business' prospects.

The restaurant, which will serve steak and seafood, is a short walk from stadiums used by the Baltimore Orioles baseball team and Ravens football team.

Mr. Haddad's business partner, Mike Finnegan, who also owns Teradine Building Consultants in Baltimore, revamped the building, which previously housed a bank branch. Only the bank's safe, which will be used to store wines and liquors, remains.

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