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You may be wondering where you can borrow money if you are a small-sized business that requires to purchase new equipment. There are a myriad of alternatives to choose from for instance, the SBA 7(a) loan, and the credit union or bank however, there are also penalties if you pay back the loan early. There are other options, such as leasing or borrowing from another lender. You will need to decide whether you want to borrow money from another source or obtain a loan. Your accountant or financial advisor can help you decide what is the best option for your business and you.

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SBA 7(a), loan
If you’re a proprietor of a business seeking to purchase new equipment, or a business owner looking acquire the necessary materials for your business, you may be able to obtain a loan via the SBA 7(a) loan program. But before you apply to the program, you must be familiar with the procedure.

The SBA 7(a), federally-backed loan, was created to offer financial assistance for small-sized businesses. There are numerous alternatives to finance small-sized businesses. The loan can be used to finance the purchase of equipment and real estate, or to purchase supplies and other commercial needs.

Depending on the circumstances, you might be able to be approved for an SBA 7(a) loan in just a few days. If you’re eligible, the lender will disburse your money and you can repay the loan using monthly payments. However, you’ll have to pay a prepayment of 25 percent or more of the loan’s remaining balance within three years of disbursement.

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Alternative lenders
Alternative lenders who offer equipment loans provide many lending options for business owners who are looking for financing. These lenders offer short- and long-term financing options and are easier to access than banks. Banks usually require lengthy paperwork and take a long approval process.

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These lenders also provide various loan products including term loans and invoice financing. Finding the best lender for your business can aid in financing your business’s growth and operations.

While alternative loans are more expensive than bank loans but they can be utilized to grow your business and keep your cash flow in control. You can also reduce the costs by opting for flexible rates.

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An equipment loan could help you get the money you need to purchase office equipment, machinery, and vehicles. But before you start the application process, consider evaluating your own personal credit. Some equipment financing companies will only allow you to get the loan when you have a stellar personal credit.

Credit unions and banks
When you need to finance equipment, there are a lot of options. Some companies opt to obtain a loan from a bank, while others prefer working with credit unions. No matter which lender, it’s important to think about your business’s needs when choosing a loan.

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A loan to finance equipment is a great option for you to secure the cash that you need to run your business. You’ll have to repay the loan on time. If you don’t, you may be paying much more interest than you thought. It is important to compare fees and terms.

It is crucial to understand the terms and conditions. While many lenders offer equipment financing loans, they all have specific application procedures. Some lenders might require a substantial downpayment. And some online lenders will charge higher interest rates than a traditional bank.

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Penalties for late repayment
If you’re considering starting your own business or you’re looking to expand the value of your equipment, paying off your loan early can be a wise choice. Not only will it save you money on the interest, it can also free up cash flow to fund other expenses. You can use the extra cash to purchase new equipment, or hire an employee for the first time, or as a cushion during times of slowness. But it’s important to consider the terms of your lender before making a commitment. Some loans have prepayment penalties and you should read your loan documents carefully.

Paying off a loan for equipment earlier can help you cut down on the amount of interest that you owe and also provide peace of mind. If you pay the loan too early, you may have to rescind your loan terms. This could adversely impact the credit of your business. If you’re thinking of resetting your loan, contact your lender and ask about the terms of their loan.

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