# Equipment Loan Calculator: Estimate Payments

Use this equipment loan calculator to estimate monthly payments and total cost of financing on an equipment loan.
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Written by Olivia Chen
Assistant Assigning Editor
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## How to use the equipment loan calculator

• 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 annualized cost of interest, plus any fees associated with the loan. If your lender doesn’t provide an APR, you can calculate it by adding the total amount of fees to the original loan amount and calculating the interest on that amount. For example, if your loan amount is \$100,000, with an interest rate of 5% and \$4,000 in fees, you would first add the fees to the original loan amount to get a new loan amount of \$104,000 (\$100,000 + \$4,000). Then, calculate the interest on this new loan amount to get the annualized payment of \$5,200 (\$104,000 x .05). Divide the payment by the original loan amount to get the APR of 5.2% (\$5,200/\$100,000).

Once you click “calculate,” the calculator will automatically generate results based on your input. You can experiment with different numbers to get an idea of what different loan scenarios will look like.

Monthly paymentThis is the amount you’ll pay every month that includes your contribution to the principal loan amount, interest and fees.
Total paymentThis 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 paidThis 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.

## What is an equipment loan?

An equipment loan is a specific type of small-business loan used for the purchase of equipment and machinery that is needed for business operations. They are typically sought by businesses that use large, expensive equipment, such as construction companies, restaurants, manufacturers or auto body shops. Equipment loans are typically secured by the equipment being financed, making them relatively low risk for lenders and a good long-term investment for a business.

NerdWallet rating

5.0

/5
NerdWallet rating

4.7

/5
NerdWallet rating

4.5

/5

Est. APR

20.00-50.00%

Est. APR

27.20-99.90%

Est. APR

15.22-45.00%

Min. credit score

625

Min. credit score

625

Min. credit score

660

## 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. For example, U.S. Bank offers equipment loans up to \$1 million with no money down, and up to 125% financing to cover the full price of the equipment plus extra costs. 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 loans offer long terms — typically 10 years or more depending on the useful life of the  equipment — and low interest rates, but you’ll 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.