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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 many options available that include the SBA 7(a), bank or credit union loan. However, there are penalties if you pay the loan off early. There are other options like leasing or loans from an alternative lender. The decision as to whether to take out an loan or borrow money from a different source is a personal one and you should consult your accountant or financial advisor to find out what is most beneficial for your business.

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SBA 7(a) loan
If you’re a proprietor of a business looking to purchase new equipment, or you’re an owner of a company looking to acquire materials for your operation, you may be able to obtain a loan through the SBA 7(a) loan program. Before you apply to the program, you must be familiar with the procedure.

The SBA 7(a), federally-backed loan, was created to provide financial aid to small businesses. There are numerous financing options available for small-sized companies. The loan can be used to finance the purchase of equipment and supplies, real estate, and other business purposes.

Depending on the circumstances, you might be able to get approved for a SBA 7(a) loan within a matter of days. If you are eligible, the lender will disburse the funds and you will be able to repay the loan using monthly installments. But, you’ll need to prepay 25 percent or more of the loan’s balance within three years from the date of disbursement.

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Alternative lenders
Alternative lenders for equipment loans provide many different lending options to business owners who are looking for funding. They can offer both long- and short-term financing options, and are more easy to access than banks. Banks typically require lengthy paperwork and an extended approval process.

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These lenders also provide various loan options ranging from term loans to invoice financing. Finding the right lender for your company can assist you in financing your company’s growth and operations.

While alternative loans are more costly than bank loans, they can be used to increase your business’s profitability and keep your cash flow in control. You can also reduce the fees by opting for flexible rates.

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An equipment loan can give you the money you need to purchase office equipment, machinery, or vehicles. But before you begin the application process, you should be sure to assess your credit score. Some equipment financing companies will only grant you the loan if you have stellar personal credit.

Credit unions and banks
When you need to finance equipment, there are plenty of options. Certain businesses choose the bank loan, while others prefer a credit union. No matter what type of lender you choose, it is crucial to take into consideration your company’s requirements when selecting a loan.

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A loan to finance equipment can be a great way to obtain the funds you need for your business. You will need to repay the loan in a timely manner. If you don’t, you could find yourself paying a lot more in interest than you thought. This is why it’s essential to compare fees and terms.

It is important to read all terms and conditions. While numerous lenders offer equipment financing loans, they all have their own procedures for applying. Some lenders might require a substantial downpayment. Online lenders might charge higher interest rates than traditional banks.

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Penalties for early repayment
If you’re considering starting your own business or you want to increase your investment in equipment, paying off your loan in advance could be a smart choice. Not only does it save you money on interest, it also frees up cash flow to meet other requirements. You can make use of the extra funds to purchase new equipment, or hire new employees or to provide a cushion during the slow times. But it’s important to consider the terms of your lender prior making an agreement. The penalties for prepayment may apply to certain loans, so make sure to study the loan agreement.

You can lower the cost of your equipment loan and get peace of assurance by paying it off early. If you decide to pay it off before the due date you’ll also be setting your loan’s terms. This could adversely impact your business’s credit. Contact your lender to find out more about the terms of your loan.

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