Equipment Loan Calculator

Use this equipment loan calculator to estimate monthly payments and total cost of financing on an equipment loan.

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Updated Mar 12, 2025 · 2 min read

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How to use the equipment loan calculator

1. Enter your information

Purchase price: The purchase price reflects the total amount the vendor is charging to purchase the desired equipment.
Down payment: Many lenders require a down payment from the small-business owner — anywhere from 10% to 30% of the purchase price depending on the lender.
Loan term: You may input your desired number of months, or base this number on the available terms from lenders you’re interested in. The longer the loan term, the lower your monthly payments; however, the total cost of financing may be higher with a longer term than a shorter term.
APR: Annual percentage rate (APR) represents the yearly cost of borrowing money. It includes interest, plus any fees associated with the loan. If you don’t know the loan’s APR, you can enter the interest rate here instead.

Did you know...

Current rates for equipment loans vary greatly, with average rates spanning 4% to 45% . That’s why it’s important to shop around with different lenders to find the best equipment loan for you.

How much do you need?

We'll start with a brief questionnaire to better understand the unique needs of your business. Once we uncover your personalized matches, our team will consult you on the process moving forward.

2. Calculate your results

Once you hit “calculate,” our tool will generate the following results:

Monthly payment. This is the amount you’ll pay every month. It includes your contribution to the principal loan amount, interest and any fees.
Total payments. This is the total amount you will pay your lender over the life of your loan. It includes the repayment of the principal amount, plus interest and fees.
Total interest paid. This is the total amount the lender will charge you for your loan. It will vary based on the length of your loan term. If your lender doesn’t charge prepayment penalties, you can save on interest if you pay your loan off early.

Feel free to adjust the numbers to explore different loan scenarios.

▲ Back to calculator

What is an equipment loan?

An equipment loan is a specific type of small-business loan used to buy equipment and machinery needed for business operations, such as medical devices, commercial vehicles, computers, food trucks and more.

Equipment loans are usually secured by the equipment being financed, making them relatively low risk for lenders and a good long-term investment for a business. However, this means that if you default on your loan, the lender may take possession of the equipment and sell it to cover its losses.

» MORE: Best equipment financing options

Where to get equipment loans

Equipment loans are available with almost every type of lender. The best fit for your business will depend on your qualifications and the time you have available.

Banks and credit unions. Banks and credit unions generally offer the most affordable options to finance equipment. However, bank loans can be some of the most difficult to qualify for, often requiring strong personal credit, at least two years in business and high annual revenue.
Online lenders. If you’re in need of a faster financing option, online lenders may be able to fund an equipment purchase in as little as 24 hours. Online lenders often have less stringent requirements to qualify for equipment loans; however, you’ll likely pay more in interest and fees.
SBA lenders. Both SBA 7(a) and SBA 504 loans can be used to finance large equipment purchases, and may be offered by banks, credit unions, certified development companies (CDCs) or community development financial institutions (CDFIs). SBA equipment loans offer long terms — typically 10 years or more depending on the useful life of the equipment — and low interest rates, but you typically need good credit to qualify.
Specialized equipment lenders. Some lenders, like JR Capital, specialize in equipment financing, especially for specific types of businesses like commercial construction or manufacturing. While these lenders likely won’t provide rates comparable to banks, it can be beneficial to work with specialized lenders that are familiar with your industry and the type of equipment you are financing.
Manufacturers. Some manufacturers offer their own financing arrangements. For example, Cat and John Deere allow business owners to finance or lease equipment directly through them. This gives time-strapped business owners a convenient option with support from customer service representatives familiar with the equipment and challenges they face.

» MORE: How to finance used equipment

Should you lease equipment, instead?

Depending on the type of equipment you need, you may be able to lease, or rent, it instead of buying it using a loan.

Deciding whether to lease or finance business equipment comes down to a few key factors:

How long you need it. If the equipment has a short lifespan or you don’t plan on keeping it long, leasing might be the smarter, more flexible option.
Your cash flow. Because leases typically come with lower upfront costs, such as no down payment, it may be the better option if you’d like to preserve cash flow for other business needs.
Your financing options. If you’re just starting out or have less-than-perfect credit, qualifying for an equipment loan may be tough. In that case, leasing may be a practical alternative while you strengthen your business credentials or build your credit history.

» MORE: Equipment leasing: what it is and how it works

Frequently asked questions

What’s the best way to use this equipment loan calculator?

Our equipment loan calculator shows how much you’ll pay each month on a real or hypothetical loan. It also shows how much of your money will go towards interest. Use this tool to estimate costs when thinking about taking out a loan for a big purchase, like farm equipment or heavy machinery. You can also use it to compare costs between lenders.

What APR or loan term should I use in the calculator?

The annual percentage rate (APR) includes both the interest rate charged on the loan plus any fees tacked on by the lender. Depending on the lender, your credit score and business financials, you can expect an APR between 4% to 45% for an equipment loan. You can expect repayment terms between three to 10 years, but it depends on the specific equipment and other factors.

What’s the difference between equipment financing and leasing?

When you finance equipment for your business, you borrow funds from a lender and pay them back slowly, over time. Your lender may have the right to possess the equipment if you fail to pay them back. Otherwise, you own the equipment outright when the loan is paid off.

When you lease, the lender owns the equipment. You’re simply renting it from them, though you may have the option to purchase it from the lender once the lease term is up.

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