Equipment loan calculator, with a lease side by side
Enter the price and the loan terms to see the monthly payment, the interest and every dollar the loan takes. Add a lease quote to compare the cash out, the buyout and who owns the equipment at the end. The math runs in your browser, so nothing you type is sent to us.
How an equipment loan works
An equipment loan pays for a specific machine, vehicle or piece of technology, and that equipment is the collateral. The funder usually records a lien on it and can take it back if the payments stop. When the last payment is made, the lien is released and the equipment is yours outright.
Many funders ask you to pay part of the price yourself. Whatever you put down comes off the amount financed, so the monthly payment and the total interest both shrink with it. The payment is fixed for the term, which makes the cost easy to plan around.
Equipment price
The total on the vendor's quote or invoice. If delivery, installation or training is being financed with the machine, include it.
Down payment
What you pay yourself at signing. It comes off the amount financed, so the payment and the interest both fall with it. Switch between a percentage and dollars to match how the quote states it.
Interest rate
The yearly rate on the loan quote. If the quote gives only an APR, enter it here and leave the fees at zero, since an APR already counts them.
Term
The number of monthly payments. A longer term lowers each payment and raises the interest paid in total.
Fees at closing
Documentation, origination and filing fees you pay when the loan closes. Ask for each one in dollars.
Resale value
Your own guess at what the equipment would sell for when the term ends. Whoever owns it keeps that value, which can change which option comes out ahead.
Loans and leases, and what happens at the end
The difference that matters most is who owns the equipment when the payments stop. A loan always ends with you owning it. A lease ends in one of the ways below, set by the contract you sign.
$1 buyout lease
The payments cover the full price of the equipment plus the leasing company's return. After the last one you pay $1 and the equipment is yours. In cash terms it works much like a loan with no down payment, so the calculator can work out the rate it implies.
Set price buyout
The lease names the buyout before you sign, as a dollar figure or as a share of the original price. You know the full cost of owning the equipment from the start, and the calculator can work out a rate for it too.
Fair market value lease
The payments cover only part of the equipment's value, so they are lower. At the end you can buy it at what it is worth then, renew, or send it back. The buyout is unknown when you sign, so enter a guess as a set price or choose Return it.
Returning the equipment
You use it for the term and hand it back, owning nothing. Ask what condition it has to be in, who pays to ship it, and what is charged for extra wear or hours.
| Option | Each month | Up front | Paid in total | At the end |
|---|---|---|---|---|
| Loan with 10% down | $1,912 | $10,000 | $124,734 | You own it |
| $1 buyout lease | $2,125 | $0 | $127,482 | You own it for $1 |
| Fair market value lease | $1,866 | $0 | $111,986 | Return it, or buy it at its value then |
How the calculator works
The loan side is a standard amortizing loan with one payment a month. The amount financed is the price less the down payment. The payment is the level amount that clears it over the term at the monthly rate, which is the yearly rate divided by 12. Fees at closing are paid in cash, so they add to the cost without changing the payment.
The lease side adds up what you pay at signing, every payment and the buyout. When the lease ends with a buyout, the calculator finds the monthly rate at which those payments are worth the price of the equipment, then multiplies it by 12. That is the actuarial method used for APRs, applied to a lease, so treat the result as an estimate rather than a disclosed rate.
Take a $100,000 machine with $10,000 down at 10% over 60 months. The payment is $1,912 a month, the interest comes to $24,734, and the loan takes $124,734 in cash from signing to the last payment.
- Amount financed
- Price − down payment
- Monthly payment
- Amount financed × r ÷ (1 − (1 + r)−n), with r = yearly rate ÷ 12
- Total cost of the loan
- Payment × n − amount financed + fees
- Cash out for the loan
- Down payment + payment × n + fees
- Cash out for the lease
- Paid at signing + lease payment × n + buyout
- Estimated lease rate
- Monthly rate at which the payments and buyout are worth the price less what you paid at signing, × 12
A $100,000 equipment loan over 3, 5 and 7 years
Stretching the same loan from 3 years to 7 cuts the payment from $3,227 to $1,660 a month. The interest more than doubles, from $16,162 to $39,450. A longer term can make sense when the equipment will earn for that long, as long as you are not still paying for it after it wears out.
| Term | Each month | Total interest | Total paid |
|---|---|---|---|
| 3 years (36 months) | $3,227 | $16,162 | $116,162 |
| 5 years (60 months) | $2,125 | $27,482 | $127,482 |
| 7 years (84 months) | $1,660 | $39,450 | $139,450 |
Taxes and Section 179
Section 179 of the tax code may let a business deduct all or part of the cost of qualifying equipment in the year it is placed in service, rather than depreciating it over several years. The rules, the limits and what counts as qualifying property are set out in IRS Publication 946.
Whether a deal is treated as a purchase or as a rental can depend on how it is written, and a lease with a $1 buyout may be treated differently from one you return. The calculator leaves taxes out. Ask your tax adviser how a loan or a particular lease would be treated for your business before you choose.
Five checks before you sign
Get every fee in dollars
Documentation, origination, filing and lease signing fees all add to the cost. A quote that shows only the monthly payment leaves them out of the comparison.
Get the end of the lease in writing
The buyout amount or how fair market value will be set, how much notice you must give, where the equipment goes if you return it, and whether the lease renews on its own if you miss a date.
Ask who insures and maintains it
Find out whether the contract makes you insure the equipment and keep it in repair, what coverage it requires, and what happens if the equipment is damaged or stolen.
Ask about paying off early
Some contracts still charge every remaining payment if you clear them early. Ask whether paying off early lowers the total, and get the answer in dollars.
Put both quotes in the calculator
Compare the total cash out and the estimated lease rate with the loan rate, using the same price. Then send one application and we take it to the funders in our network. See how equipment financing works with us.
Questions about equipment loans and leases
Equipment loan calculator
Take the price less your down payment, then apply the standard loan formula: amount × r ÷ (1 − (1 + r)^−n), where r is the yearly rate divided by 12 and n is the number of months. A $100,000 machine with $10,000 down at 10% over 60 months comes to about $1,912 a month, with $24,734 of interest over the term.
It depends on what you want at the end and what each option costs. A loan and a $1 buyout lease both end with you owning the equipment, so compare the total cash each takes and the rate each works out to. A fair market value lease or one you return has lower payments because you pay for only part of the equipment's value, which can suit equipment you expect to replace. Enter both quotes above to see them side by side.
A lease whose payments cover the whole price of the equipment, after which you buy it for $1. Priced at 10% over 60 months, a $100,000 machine would cost about $2,125 a month, which works back to an estimated rate of 10.0% once the $1 is added. Because you end up owning it, it compares directly with a loan.
At an example rate of 10% with nothing down, it is about $3,227 a month over 3 years, $2,125 over 5 years and $1,660 over 7 years. Your rate and term will differ, so enter them in the calculator for your own figure.
On $100,000 at 10%, the 7 year loan lowers the payment by about $465 a month and adds about $11,968 in interest: $39,450 against $27,482. The Compare terms tab shows the same for your numbers.
Often, yes. The funders we work with finance used equipment as well as new. A funder may ask about the age, hours or condition, want the seller's invoice or an appraisal, and match the term to how long the equipment is expected to last. The calculator works the same way: enter the price you are paying.
No. The calculator runs in your browser and sends nothing to us. The numbers are kept in the page address only so you can bookmark the page or send it to someone.
Read more about equipment financing
- Equipment financingFinancing for machinery, vehicles and technology, secured by the equipment itself.
- How equipment financing worksLoans and leases, down payments, Section 179 and financing with weaker credit.
- SBA and bank loansLonger terms and lower monthly payments, for businesses that qualify.
- Business line of creditA revolving facility you draw against as needed, paying only for what you use.
