PLG Capital Funding Group LLC is dedicated to bringing our clients benefits anyway we can including bringing you tips from industry professionals to help your business or personal finances. Part of this weeks financial insight is brought to you from George Schofield, Contributing Editor,  please click below to read full article.

How to Apply for Your First Business Loan

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If you are among the 40% of baby boomers AARP says plan to work until they die, and if you plan to start or buy a business instead of working for someone else, your venture will likely involve some sort of financing.

Unless you plan to fund this enterprise solely with savings—not recommended unless you are fabulously wealthy—you’ll need a business loan. As any lender can tell you, the better prepared you are before making your request for business credit, the greater the likelihood of getting approved.

Part of this preparation is understanding what bankers will need to approve you. Banks make a major portion of their profits from loans. They’re not in the business of saying no; they just say it when your application doesn’t meet lending requirements, which are much stricter now than before the financial crisis. But be aware that start-ups are almost always considered risky bets, and many lenders are reluctant to finance them. Also know that many larger banks won’t even consider small loans, which are less profitable than larger loans but require the same amount of time to analyze and administer.

Don’t let these discourage you. Get organized. How small is small? According to the Small Business Administration (SBA), the median small business loan from a financial institution is roughly $135,000, with highest around $250,000. SBA loans, which are not underwritten by the US Government but by SBA partners (lenders, community development organizations and microlending institutions), range from $5,000 (a microloan) to $5 million, with the average around $371,000.

Do Your Homework So what exactly are lenders looking for? Basically, they’re searching for clues that your business will be able to repay the loan, plus interest, with metronomic regularity. Most financial institutions will expect the loan to be fully secured, either with business assets or personal collateral. Having some skin in the game, meaning you have your own equity invested in the business, strongly works in your favor.

Click to read full article: http://smallbusiness.foxbusiness.com/starting-a-business/2013/12/12/how-to-apply-for-your-first-business-loan/