Equipment financing calculator
Work out the monthly payment on an equipment loan or lease, what you pay in total, and what the financing costs — with a down payment and a buyout at the end.
- Covers
- Loans and leases with a buyout
- What it sends
- Nothing — it runs in your browser
- Monthly payment
- $1,588
- Amount financed
- $76,500
- Total paid, with the down payment
- $103,781
- Cost of financing
- $18,781
Before sales tax. On a loan, GST/HST is paid on the purchase; on a lease it is added to each payment. An estimate, not an offer of credit.
A worked example
- An $85,000 machine, 10% down, five years at 9%
- As a loan: 60 payments of $1,588, $103,781 in total with the down payment, so the financing costs $18,781.
- The same machine on a lease with a 10% buyout
- 60 payments of $1,487, then $7,650 to buy it: $105,345 in total. A lower payment, and $1,564 more over the term.
Illustrations of the arithmetic, not rates anyone is being offered.
Questions
- How is an equipment loan payment calculated?
- Take the price, subtract the down payment, and repay what is left in equal monthly payments over the term, with interest charged on the balance still owed. The calculator does the arithmetic; the total paid and the cost of financing are the figures worth comparing between offers.
- What is the difference between an equipment loan and a lease?
- With a loan you own the equipment from the start and the lender registers its interest until it is paid off. With a lease the lessor owns it and you pay to use it, usually with the option to buy it at the end. A lease with a buyout has lower payments because part of the price is left until the end.
- What is a $1 buyout lease?
- A lease where you can buy the equipment for a nominal amount at the end. It works much like a loan: the payments cover nearly the whole price. A fair market value lease leaves a larger amount to the end, so the payments are lower but the final price is decided later.
- Do I need a down payment?
- Not always. It depends on the equipment, its age and the business. A down payment lowers the payment and the total cost of financing, and lenders ask for one more often on used equipment or for younger businesses.
- Can I finance used equipment?
- Generally, yes. Age and hours tend to shorten the term rather than rule the equipment out, and a private sale needs a bill of sale, the serial number and proof nothing else is registered against it.
Deciding between the two? Equipment leasing or a loan goes through ownership, sales tax and what happens at the end, and construction equipment financing covers heavy equipment.
Financing a machine?
We take one application to the lenders we work with. You see the total before you decide anything.