Business owners need a certain amount of equipment to keep their business up and running properly. Without that equipment, it makes it hard to carry out the functions of everyday business transactions. However, many business owners cannot afford to pay for all of the items they need up front. Because of this, they turn to equipment financing to get the job done quickly and easily. To make sure you get the financing you need, take the time to ask a few different questions of the lender. You want to make sure you have all the information you need before settling on one lender or another.
Is there a penalty for paying the loan off early?
Many lenders have penalties for paying your loan off early. Because of this, you need to ask the specifics of the loan to make sure that isn't the case for you. The last thing you want is to pay a hefty fee simply because you are trying to eliminate a few bills and reduce your debt load. In knowing this upfront, you can make an informed decision about whether you want to go with the lender and avoid paying the loan off or if you are willing to pay the price to pay the loan off ahead of schedule.
Can the loan be refinanced?
Make sure to ask if you are eligible to refinance the loan at any point. While some loans are able to be refinanced, others aren't. The lender might have strict rules on the terms of their contract that prohibit you from refinancing with anyone else. This will help you better determine if your loan payment is going to fluctuate or not.
Who covers the maintenance on the equipment while it is being financed?
Some lenders will pay for the maintenance on the item for the duration of the loan, while others won't pay for it at all. You need to know who is going to pay for any repairs right from the start. That way you can better plan for any repairs that might be coming your way down the road. It helps you to build a nest egg knowing that you are going to have to handle any issues with your equipment.
By asking the three questions above, you can better prepare yourself for what might be coming your way with your equipment finance loan. Don't ever assume anything; always ask beforehand and save yourself the hassles. To learn more, contact a company like Solution 7 Incorporated.