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Equipment Loan and Leasing Calculator

Use this equipment loan and leasing calculator to estimate monthly payments and total cost of financing or leasing business equipment.

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Ryan Brady, CFP®
Written by 
Ryan Brady, CFP®
Ryan Brady, CFP®
Lead Writer & Content Strategist
8 years of experience
Expertise
  • Small-business lending
  • Insurance
Ryan Brady is a CFP® professional and lead writer at NerdWallet covering small-business. Ryan enjoys simplifying complex finance topics to help entrepreneurs make smarter decisions.
Before joining NerdWallet, Ryan ran an online retail business, giving him firsthand knowledge of the challenges and opportunities small-business owners face.
His work has appeared in TechCrunch, MarketWatch, Yahoo, Nasdaq and more.
He lives in Fort Myers, Florida.
Published inMarketWatchMorningstarNasdaq.com
Lead Writer & Content Strategist
Sally Lauckner
Edited by 
Sally Lauckner
Sally Lauckner
Managing Editor
18 years of experience
Expertise
  • Business financing
  • SBA loans
  • starting a business
Sally Lauckner is an editor on NerdWallet's small-business team. She has more than a decade of experience in online and print journalism. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content and specializing in business financing. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She is based in New York City.
Managing Editor
Olivia Chen
Co-written by 
Olivia Chen
Olivia Chen
Lead Writer
Expertise
  • Small-business lending
  • business finance
Olivia Chen is a former small-business writer at NerdWallet. She has five-plus years of experience in the CDFI (Community Development Financial Institution) industry, particularly working with MWBE (Minority/Women-Owned Business Enterprise) and LMI (Low Moderate Income) small businesses. She is certified through the American Banker’s Association in Business and Commercial Lending. Her work has appeared in The Associated Press and NASDAQ among other publications.
Published inNasdaq.comThe Associated PressThe Washington Post
Lead Writer

How to use our equipment loan and leasing calculator

Financing or leasing business equipment can be expensive, and comparing options isn’t always easy.
This calculator helps make sense of the costs involved so you can focus on finding the loan or lease agreement that works best for your business.
Use our calculator to:
  • Estimate the monthly payments and total cost of an equipment loan.
  • Estimate the total cost of leasing business equipment instead.
» MORE: Best equipment financing options

How much do you need?

See Your Loan Options

with NerdWallet Small Business

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.

1. Enter your equipment loan details

  • Equipment purchase price. The total amount the vendor is charging to buy the equipment. 
  • Down payment. This is the amount you pay upfront. Many lenders require a down payment between 10% to 30% of the purchase price depending on the lender.
  • Loan term. How long you’ll have to pay off your loan. The longer the loan term, the lower your monthly payments, but the higher the total interest over the life of the loan.
  • APR or interest rate. 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.
  • Additional upfront costs (optional). Include expenses you’ll pay upfront that aren’t already included in the loan’s APR, such as any sales tax, delivery or installation fees.
  • Expected monthly revenue or savings generated (optional). The amount you expect the equipment will generate or save each month. We’ll use this, along with the operating cost, to estimate how much cash you might have leftover after your loan payment.
  • Monthly operating or maintenance cost (optional). How much you expect to pay each month to operate or maintain the equipment.
Did you know...
Current rates for equipment loans vary greatly, with average rates spanning 4% to 45%. Shopping around with different lenders can help you find the best equipment loan for you.

2. Calculate your loan costs

Once you hit “calculate,” our tool will generate the following estimates:
  • Monthly payment. The amount you’ll pay every month. It includes principal, interest and any fees. 
  • Amount financed. The total amount you’re borrowing to buy the equipment. It’s the purchase price minus the down payment. 
  • Total interest paid. The total amount of interest you’ll pay over the life of the loan. Generally, the higher your APR and longer your loan term, the more you’ll pay in interest overall.
  • Total loan payments. 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.
  • Estimated total cost. The overall cost of buying the equipment, including your down payment, loan payments and any additional upfront costs you entered.
  • Net cash generated. How much cash the equipment will generate each month after maintenance costs.
  • Cash remaining after loan payment. How much you’ll have leftover after making your loan payment. A negative number means the equipment’s revenue or cost savings isn’t enough to cover loan payments. This estimate doesn’t account for factors such as potential tax benefits or the equipment’s future resale value. 
  • Amortization schedule. This shows how each monthly payment is split between principal and interest, and how your balance changes over time.
Feel free to adjust the numbers to explore different loan scenarios.

1. Enter your equipment lease details

  • Monthly lease payment. The amount you’ll have to pay each month to lease the equipment.
  • Lease term. How long you’ll lease the equipment.
  • Upfront payment. Any upfront payments your leasing company charges, like a security deposit or advanced payments.
  • Other nonrefundable fees (optional). Any other nonrefundable fees that aren’t included as part of your monthly lease payment, such as origination or administrative fees.
  • End-of-lease purchase price (optional). Some leases give you the option to buy the equipment when the lease ends. If yours does, enter the expected purchase price here.

2. Calculate your lease costs

Once you hit “calculate,” our tool will generate the following estimates:
  • Total scheduled lease payments. The total monthly lease payments you’ll make over the full lease term.
  • Upfront costs. The total amount you’ll pay upfront, including your upfront payment and any other nonrefundable fees you entered.
  • Total lease cost. The total cost of leasing the equipment, including any fees and upfront payment.
  • Total cost if you buy at the end. The total estimated amount you’ll spend if you make all scheduled lease payments and then buy the equipment at the end.
▲ 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: 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 finance or lease 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: Best equipment leasing companies

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: Best equipment financing options
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Frequently asked questions

Use this tool to estimate costs when thinking about leasing or taking out a loan for a big purchase, like farm equipment or heavy machinery. You can also use it to compare costs between lenders or leasing companies.
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.
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 take 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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