Equipment loan calculator: finance it or lease it, side by side
A payment on its own does not answer the question equipment buyers are actually asking. This runs the loan and the lease together, over the same machine and the same term, and shows what each costs in total — and what you own when it is finished.
From your lease quote. Leave at 0 to skip the comparison.
$1 on a capital lease; 10–20% of price on a fair-market-value lease.
Finance — equipment loanLower total cost
per month for 60 months
Lease — then buy outLower total cost
per month for 60 months
An estimate for comparison, not a quote. The loan side is a standard fully amortising calculation. The lease side totals the payments you enter plus any buyout, which is the only honest way to compare a lease whose rate is not disclosed — and lease quotes usually do not disclose one.
A lease almost always wins on the monthly payment. That is not the question.
Lease payments are lower by construction, and comparing them to a loan payment is the most common mistake made in equipment finance. The two numbers are not measuring the same thing.
A loan payment repays the whole price of the machine over the term. A lease payment covers only the value the machine is expected to lose during the term — the rest is deferred into a buyout at the end, or handed back with the equipment. On a fair-market-value lease, the payment can look dramatically better while the total cost of ownership is higher, because the buyout has not been counted yet.
That is why the calculator above asks for the buyout and adds it in. The comparison only means something once the end of the term is included on both sides. A $1 buyout capital lease is, economically, a loan with a different label; a 15% fair-market-value buyout on a $120,000 machine is another $18,000 that the monthly payment never showed you.
There is a second, quieter difference. On a loan you own the asset from day one and it sits on your balance sheet; on a true operating lease you do not, and at the end you may be handing back a machine you have paid most of the value of. Neither is wrong — but which you want depends on whether the equipment holds value and how long you intend to keep it.
What changes an equipment quote
Four things move equipment pricing more than anything else, and three of them are decided before you apply.
| Driver | Why it moves the quote |
|---|---|
| New or used | Used equipment carries more uncertainty about condition and resale, so terms are typically shorter and pricing higher. Age and hours limits vary by funder and by machine type |
| The asset’s resale market | Equipment with a deep, liquid second-hand market secures better than equipment that is specialised or difficult to move. This is why two machines at the same price finance differently |
| Term against useful life | Funders resist terms that run past the working life of the machine, because the collateral would be worth less than the balance. This caps the term more often than credit does |
| Down payment | Money down reduces the amount at risk and usually improves both the rate and the odds. Zero-down is available on strong files and is not the default |
Note what is not on that list: the equipment itself does much of the underwriting work, which is why this is one of the more accessible forms of business financing. The vendor quote or invoice is normally required, because the funder is financing a specific identified asset rather than a general need. The wider picture is on how equipment financing works.
The deduction can change the comparison, and the calculator above deliberately does not model it
Section 179 of the Internal Revenue Code lets a business elect to deduct the cost of qualifying equipment in the year it is placed in service, rather than depreciating it across many years. For most equipment buyers this is the single largest number missing from a payment comparison — and it is also the number a financing site has no business estimating for you.
| Tax year | Maximum deduction | Phase-out begins at |
|---|---|---|
| 2026 | $2,560,000 | $4,090,000 |
| 2025 | $2,500,000 | $4,000,000 |
Limits as published in IRS Publication 946, How To Depreciate Property. The deduction is reduced dollar-for-dollar by the amount of qualifying property placed in service above the phase-out threshold. Separately, P.L. 119-21 reinstated the 100% special depreciation allowance for certain qualified property acquired and placed in service after 19 January 2025. These figures change annually.
Three points matter for the finance decision. Financed equipment can still qualify — the election generally turns on the equipment being placed in service, not on how it was paid for, which is why buyers frequently finance a machine and still claim in the same year. The lease structure changes the treatment, sometimes substantially, and a true operating lease is handled quite differently from a capital lease or a loan. And the benefit depends entirely on your own tax position — on having taxable income to deduct against, on your rate, and on what else you have placed in service that year.
Fundur is not a tax advisor and this is not tax advice. Those variables are the reason the calculator above stops at cash cost. Take the two totals it produces to your accountant and ask them to run the after-tax comparison, because that is the version that decides it.
Three things this calculator cannot tell you
Your actual rate
The rate box is an input, not a prediction. Equipment pricing depends on the asset, its age, the term against its useful life, your trading history and the funder. Enter a quoted rate where you have one, and treat the default as a placeholder rather than a market average.
The lease’s implied rate
Lease quotes commonly state a payment and a term without an interest rate, and the rate implied by them is not always disclosed on request. This tool compares total cash out precisely because that is the figure both sides can be measured on honestly.
Fees, insurance and what happens at the end
Documentation fees, filing fees, required insurance, maintenance obligations and end-of-lease return conditions all sit outside the payment. On leases in particular, return conditions and excess-wear terms are worth reading before the payment is compared at all.
Two neighbouring tools may fit better depending on what you are weighing. For a plain amortising payment on any business loan, use the general business loan calculator. If the equipment is part of a larger, government-guaranteed package rather than a standalone purchase, the SBA loan calculator models the guaranty fee that goes with it — though as the funding-speed data shows, that route is measured in weeks rather than days.
Fundur is a financing marketplace, not a lender, and is not a tax or accounting advisor. This calculator produces estimates for comparison only. It is not a loan offer, a quote, or a commitment to lend, and actual terms are set by the funding partner.
Equipment loan calculator FAQs
How is an equipment loan payment calculated?
As a standard fully amortising loan on the amount financed, which is the equipment price less any down payment. The monthly payment is fixed so that principal and interest clear exactly over the term. Early payments are mostly interest and later ones mostly principal.
Why is the lease payment lower than the loan payment?
Because it is covering less. A loan payment repays the whole price of the machine over the term, while a lease payment covers mainly the value the machine is expected to lose during it, deferring the rest into an end-of-term buyout or a return. Comparing the two monthly figures without including the buyout is the most common error in equipment finance.
What buyout figure should I enter?
Use the figure on your lease quote. A capital or "$1 buyout" lease is economically close to a loan, so enter 1. A fair-market-value lease typically settles somewhere around 10 to 20 per cent of the original price, though the actual amount is determined at the end of the term rather than fixed at signing.
Is it better to lease or buy equipment?
It depends on how long you will keep the machine and whether it holds value. Buying tends to win on total cost when the equipment has a long working life and a solid resale market. Leasing tends to suit equipment that dates quickly, or a business that would rather protect cash and hand the asset back. Run both totals above, then check the tax treatment with your accountant.
How much down payment do I need for equipment financing?
It varies by funder, by the asset and by your trading history. Money down reduces the amount at risk and usually improves both the rate and the odds of approval. Zero-down structures exist but are offered on stronger files rather than as the default.
Can I finance used equipment?
Frequently, yes. Used equipment generally carries shorter terms and higher pricing because condition and resale value are less certain, and most funders apply age or hours limits that vary by machine type. A machine with a deep second-hand market finances more easily than a specialised one.
Does this calculator include Section 179 or depreciation?
No, deliberately. The benefit depends on your taxable income, your rate, the structure you choose and what else you have placed in service that year, so any figure produced here would be a guess presented as arithmetic. The published limits are set out above; take the totals to your accountant for the after-tax comparison. Fundur is not a tax advisor.
How long can an equipment loan run?
Terms are usually set against the working life of the asset rather than by preference, which is why they commonly run two to seven years and why a funder may decline a term you would prefer. Financing a machine for longer than it will usefully work leaves the balance exceeding the collateral, and funders price or refuse that accordingly.
Bring the vendor quote. We will show you the finance and lease options together.
One application, compared across funders — including the ones whose age and useful-life rules actually fit the machine you are buying.
Fundur is a financing marketplace, not a lender. Checking your options uses a soft credit pull and does not affect your credit score.