United Bank & Trust Blog

Marilyn Buka

There has been a wave of bankruptcies in the past year, some because people were irresponsible, but mostly because they’ve been backed into a corner by the economy. For instance, someone loses a job and they start using credit cards to keep up, and suddenly they’re in too deep.

We’re seeing people in bankruptcy we don’t usually see. Seniors, for example. They’re retired and have seen their investments shrink dramatically, but they still have expenses; so again, they use credit cards. The problem is that the home equity loans they may have used just aren’t available anymore because of falling home prices. Many times, bankruptcy is their only solution.

Bankruptcy affects us all — whether through tightened loaning restrictions, to banks having less to loan, to credit card companies passing on the costs of defaults. But the important thing to remember is that it’s not the end — you can emerge from it more money-savvy than you were before.

In recovering from bankruptcy, my number one rule is: Take It Slowly. Take a common sense approach. Make a budget, and figure out how to have more money coming in than goes out. Get one credit card, period, and pay it off at the end of every month. Try to pay cash for purchases. Start a savings account and pay yourself based on your budget every month. Take control of your finances, realize that you have to make concessions, and plan for the unexpected. Save up for big purchase or for holiday and birthday gifts. Don’t let yourself get into a financial bind again because you suddenly have to buy a new set of tires or refrigerator.

We don’t like to deny loans, but sometimes we have no alternative but to deny the loan request. We don’t do anyone a favor by overburdening their finances. When we must deny a loan, I’ll sit down with the client and a budget sheet to help them understand, and perhaps show them how to budget better.

Times have been hard, but hopefully, we’re all learning lessons about fiscal responsibility. Hopefully, we’ll all emerge from this more willing to save, to budget, and to make wise choices.

Mike Chatas

Even though the economy seems to be rebounding, it’s still a rough time to be a small business owner in Michigan. Credit is tight, and banks are being squeezed by losses, loan defaults, and by regulators urging caution. Even more, bigger regional banks aren’t lending as much as they used to in our state, so the pressure on community banks like United has grown.

Well, I’m happy to say United is doing something big for small business – we’re still lending. You see, even before the economy took a nose dive, we were planning ahead. We invested in the infrastructure and staffing to create United Structured Finance, and to build the expertise we needed to take advantage of government loan programs from the Small Business Administration.

There are two ways we use the SBA program to the advantage of our business customers. Number one is through a guaranty of up to 90% of the loan from the SBA. This allows us to sell the guaranteed portion of the loan into other markets, which replenishes our cash. Second, the SBA will participate in the loan – that is put up a portion of the money – so that United maintains more cash available to lend.

We want to lend as much as possible to keep our local economy healthy and growing. We’re the number one SBA lender (in dollars approved) in Washtenaw, Livingston and Lenawee Counties, with over $20 million lent in the past year. These programs help us support economic development and job retention, right here, right now. In 2009, we helped to retain over 567 jobs in Michigan.

We know that there’s nothing small about small business. So we’re making a big effort to help small business thrive. If you’d like to know more, take advantage of my webinar on November 18, 2009 at 4:00pm. Click here to learn more.