About the Equipment Loan Calculator
This equipment loan calculator estimates the monthly payment for financing machinery, vehicles, medical or restaurant equipment, technology or any other business asset. Enter the equipment price, sales tax, down payment, trade-in value and any fees rolled into the loan, then the rate and term. It shows the amount financed, the payment, total interest and the full cost of ownership.
Many equipment finance agreements include a balloon or residual — a lump sum due with the last payment — to lower the monthly cost, and some collect each payment at the start of the month rather than the end. Both are supported: set the balloon as a percentage of the equipment price and choose payments in advance or in arrears to match your quote.
It suits owner-operators, contractors, farmers and small businesses comparing dealer financing, bank loans and equipment finance companies. The rate is treated as fixed, and the calculator does not model tax depreciation such as Section 179 expensing, which can reduce the after-tax cost of buying.
With the default inputs, the monthly payment is $1,538.74. Change any value above to recalculate instantly.
How to use the equipment loan calculator
- 1Enter the equipment price and any sales tax that will be financed.
- 2Enter your down payment, trade-in value and any fees added to the loan.
- 3Enter the interest rate and choose the term.
- 4Add a balloon percentage and payment timing if your quote includes them.
- 5Compare the monthly payment, total interest and total cost across scenarios.
Formula and method
The amount financed A is the price plus sales tax and financed fees, minus the down payment and trade-in. With a balloon B due with the last payment, only the present value of everything except the balloon is amortized, so the payment is the standard level payment on A − B ÷ (1 + r)^n, where r is the monthly rate and n the number of payments.
When payments are due at the start of each month (in advance, common in equipment finance agreements) each payment is made one month earlier, so it is the arrears payment divided by (1 + r). Total interest is all payments plus the balloon minus the amount financed. Total cost adds back the down payment and trade-in value you contributed.
- A
- Amount financed
- B
- Balloon or residual due at the end
- r
- Monthly interest rate (annual rate ÷ 12)
- n
- Number of monthly payments
Worked examples
$85,000 machine, $10,000 down, 8.5% for 60 months
Financing $75,000 at 8.5% over 60 months gives a payment of $1,538.74. Sixty payments total $92,324, so interest is about $17,324 and the machine costs $102,324 including the down payment.
Same deal with a 20% balloon
A $17,000 balloon (20% of the price) is due with the last payment, so the monthly payment drops to about $1,310. Because more principal stays outstanding for longer, total interest rises to about $20,623.
$40,000 truck, 7% tax, $5,000 trade-in, $350 fee, 9.9% for 48 months in advance
Tax adds $2,800 and the $350 fee is financed, while the $5,000 trade-in reduces the balance to $38,150. The arrears payment at 9.9% over 48 months would be $965.75; paying at the start of each month lowers it to $957.85.
Frequently asked questions
What interest rate can I get on an equipment loan?+
Rates depend on credit, time in business, the equipment and the lender. Established businesses with strong credit may get rates similar to other secured business loans, while startups or weaker credit can pay well into double digits. Always compare the APR, which includes fees.
How much down payment do equipment loans require?+
Many lenders finance 80% to 100% of the equipment cost because the equipment itself is collateral. A down payment of 10% to 20% is common for newer businesses or specialized equipment, and it lowers both the payment and total interest.
What is a balloon or residual on equipment financing?+
It is a lump sum due with the final payment. It lowers the monthly payment because less principal is repaid during the term, but you pay more total interest and need cash, refinancing or a trade-in to cover it at the end.
Is it better to lease or finance equipment?+
Financing builds ownership and usually costs less over the full life of long-lived equipment, while leasing keeps payments lower and makes upgrades easier for technology that ages fast. Compare both with a lease vs buy calculator, including tax treatment.
Can I deduct equipment loan payments?+
You generally deduct the interest as a business expense and recover the equipment cost through depreciation, such as Section 179 expensing or bonus depreciation in the US, rather than deducting the principal payments themselves. Ask a tax professional.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.