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You might be wondering where you can borrow money if you are a small business that needs to purchase new equipment. There are a myriad of options to choose from, like the SBA 7(a) loan or the credit union or bank but there are some penalties to pay back the loan early. In addition, there are other alternatives available for you, including leasing and the loan of an alternative lender. The decision about whether you should get an loan or borrow money from another source is a personal one, so you should consult your financial advisor or accountant to determine which option is best for your business.

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SBA 7(a) loan
Whether you’re a business owner looking to purchase new equipment, or a business owner looking to acquire the necessary materials for your business, you may be able to obtain a loan through the SBA 7(a) loan program. However, before applying you must understand the procedure.

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

Based on your particular situation depending on your situation, you may be able to be approved for an SBA 7(a) loan in just a few days. If you are eligible the lender will consider your application and make monthly repayments. You will need to prepay 25% or more of the loan balance within three years.

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Alternative lenders
Alternative lenders for equipment loans offer numerous alternative financing options for business owners who are looking for funding. They can offer short- and long-term funding options and are easier to access than banks. Banks often require lengthy paperwork and a long approval process.

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These lenders also provide various loan options ranging from term loans to invoice financing. Finding the best lender for your business can aid you in financing your business’s expansion and operations.

While alternative loans may be a bit more costly than bank loans however, they can help you grow your business while keeping your cash flow in check. Additionally, the fees can be cut by selecting the flexible rate option.

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An equipment loan can get you the funds you require to buy office equipment or machinery, or even vehicles. Before you start the application process, make sure you check your credit rating. Companies that finance equipment won’t be able to approve you for an loan if your credit score is good.

Banks and credit unions
When you need to finance equipment, there are plenty of options. Certain businesses choose a bank loan while others choose a credit union. No matter which lender, you’ll need to think about your company’s needs when selecting the right loan.

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A financing loan for equipment is a fantastic way for you to get the money that you require for your business. You’ll need to repay the loan on time. If you don’t do this, you’ll end up paying more in interest than you originally thought. This is why it’s crucial to compare terms and fees.

It is also important to read the entire fine print. While many lenders offer equipment financing loans, each has their own application processes. Some lenders might require a substantial downpayment. Online lenders might charge higher interest rates than traditional banks.

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Penalties for repaying early
Making the decision to pay off your loan early is a wise choice, regardless of whether you plan to start your own business or increase your investment in equipment. Not only will it save you money on interest, but it can also free up cash flow for other needs. The extra cash can be used to purchase new equipment, hire new employees, or to cushion your business during periods of low demand. It is important to be aware of the terms of your lender prior to making a commitment. Some loans come with penalties for prepayment and you should go over the loan documents carefully.

You can lower the rate of interest on your equipment loan and have peace of mind by paying it off early. If you pay it off too early you could be required to rescind the loan terms. This can adversely affect 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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