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You may be wondering where you can obtain financing if you run an unprofidential business that needs to purchase new equipment. There are a variety of options to choose from for instance, the SBA 7(a) loan, and the credit union or bank but there are some penalties if you repay the loan late. Additionally, there are other alternatives available for you, including leasing and loans from an alternative lender. The decision as to whether you should take out a loan or borrow funds from another source is a decision that is personal to you and you should consult your accountant or financial advisor to determine what is the best option for your business.

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

The SBA 7(a) federally-backed loan, was created to offer financial assistance for small-sized companies. There are numerous options for financing small-sized companies. The loan can be used to finance the purchase of equipment and supplies, real estate as well as other business-related needs.

Depending on your situation, you might be able to be approved for an SBA 7(a) loan in just a few days. If you are eligible the lender will then disburse the money and you are able to repay the loan in monthly payments. You will have to prepay 25% or more of the loan balance within three years.

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Alternative lenders
Alternative lenders for equipment loans offer an array of alternative lending options to business owners seeking financing. These lenders offer short- and long-term funding options, and are more easy to access than banks. Banks typically require lengthy paperwork and take a long approval process.

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These lenders also offer a variety of loan products ranging from term loans to invoice financing. Finding the best lender for your business can assist you in financing your company’s expansion and operations.

Although alternative loans can be less expensive than bank loans, they can help you grow your business while keeping your cash flow under control. Additionally, the costs are reduced if you select a flexible rate option.

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An equipment loan can get you the cash you need to purchase office equipment, machinery, or vehicles. Before you begin the application process, you should consider evaluating your personal credit. Companies that finance equipment won’t be able to approve you for the loan if you have a credit score is high.

Credit unions and banks
There are a variety of options when it comes to financing equipment. Some businesses choose to get loans from banks, while others prefer to work with a credit union. Whatever the lender, it’s important to think about your business’s needs when deciding on the right loan.

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A equipment financing loan is a fantastic way for you to get the money that you need for your business. However, you’ll need to pay off the loan on time. You may end up paying more than you anticipated. It’s the reason it’s so important to compare fees and terms.

You should also be sure to read all the fine print. Although there are many lenders that offer equipment financing loans, they all have their own application processes. Some lenders might require a substantial downpayment. Some online lenders have higher interest rates than a traditional bank.

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Penalties for repaying early
Repaying your loan in the early stages is a wise decision regardless of whether you plan to start a new business or increase your equipment investment. It’s not just a way to save money on interest costs, but also allows you to have more cash flow to use for other purposes. You can use the extra cash to acquire new equipment, or hire new employees, or as a cushion during the slow times. Before you commit to a loan, you must read the terms of the lender. There are penalties for early repayment that be applicable to certain loans therefore, make sure you study the loan agreement.

Paying off a loan for equipment early can help reduce the amount of interest due and give you peace of mind. If you pay it off too early, you may have to rescind the loan terms. This could affect your business credit. Contact your lender for more about the terms of your loan.

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