Equipment Loan Calculator
Compare buying equipment with a loan against leasing it. Enter the price once and see both monthly payments, the total cost of each, and what you own at the end.
Equipment usually secures its own financing, which often means a lower rate than unsecured financing.
An estimate for planning only, not an offer of credit. Your actual rate, terms and payment depend on your business and the lender. Nothing you enter is saved or sent.
See your real numbersYear-by-year breakdown
| Year | Balance paid | Interest paid | Balance left |
|---|
Example
For a $150,000 machine at 9% over five years, a loan with $15,000 down costs about $2,802 a month. A fair market value lease with a 10% residual and nothing down costs about $2,915 a month, and you can buy the machine for $15,000 at the end or hand it back.
Loan or lease?
With an equipment loan you own the equipment from the start, usually put some money down, and the equipment secures the loan. With a lease the finance company owns it and you pay to use it. A $1 buyout lease works much like a loan with no down payment: you own it for $1 at the end. A fair market value lease has lower payments because you do not pay for the part of the value left at the end (the residual). You can buy it at that price, hand it back or upgrade.
A lease often makes sense for equipment that dates quickly, like technology. A loan often makes sense for equipment you will run for many years, like heavy machinery or trucks.
Tax treatment
Loans and leases are treated differently for tax, and Section 179 lets many businesses deduct the cost of qualifying equipment in the year it is bought. The rules and limits change, so check with your accountant before deciding on tax grounds.
Financing equipment
See how it works on our equipment financing page.
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Frequently asked questions
How do I calculate an equipment loan payment?
Take the down payment off the price, then use the amount financed, the interest rate and the term. The calculator does this and shows the total cost including the down payment.
Is it better to lease or buy equipment?
Buying with a loan usually costs less overall if you keep the equipment for a long time. Leasing keeps the monthly payment and upfront cost low and makes it easier to upgrade. The calculator shows both side by side.
What is a $1 buyout lease?
A lease where you can buy the equipment for $1 at the end. It works much like a loan with no down payment, so the payments are close to a loan for the full price.
What is a fair market value lease?
A lease where you can buy the equipment at the end for its value then, or return it. Because you do not pay off that remaining value, the monthly payments are lower.
This calculator gives estimates for planning only. It is not an offer of credit, and the results are not financial advice.
Ready to see your real numbers?
Tell us what your business needs and review available structures with a financing specialist.