Determine How Much You Can Afford
Whether your business operates in an office filled with customized computers or as a landscaping company with a fleet of zero-turn mowers, it depends heavily on specialized tools, vehicles, and equipment to function efficiently.
However, equipping your business with these essential items can be quite costly. Estimating the financing costs for such purchases can be difficult without the right tools.
Our intuitive equipment financing calculator is specifically designed to help you understand the terms and costs associated with financing your equipment needs. By using this tool, you can accurately project your payments and make informed decisions about investing in the equipment that keeps your business running smoothly.
Estimate Your Expenses with the Equipment Financing Calculator
The equipment loan calculator is a helpful tool designed to estimate your payment options based on various loan amounts, interest rates, and terms.
We encourage you to experiment with the calculator by adjusting the interest rates and repayment periods to see how they impact your monthly payments. You can tailor the terms to either increase or decrease your payments, depending on your financial preferences.
Here are the steps to follow when estimating your payment:
Step 1: Enter the total cost of the equipment you plan to finance.
Step 2: Input the estimated interest rate. These rates typically range from 8% to 24%, depending on your business’s qualifications and down payment.
Step 3: Select the financing term in months. The term will vary based on your business’s eligibility, typically ranging from 12 to 72 months.
Step 4: Calculate. The equipment financing calculator will provide you with the estimated monthly payment.
Please note that you might incur a one-time loan origination fee, an upfront cost when the loan is funded, which is not included in the equipment loan calculator results.
It is important to remember that this equipment loan calculator is specifically designed to estimate the terms of equipment loans for purchases. It does not function as an equipment lease calculator and cannot provide estimates for equipment lease payments.
Key Features of the Equipment Finance Loan Calculator
The equipment loan calculator has the following inputs:
Loan Amount
Securing an equipment loan that covers the full value of the equipment you intend to purchase depends on several key factors. These include the lender you are working with, your business’s specific qualifications, and the total value of the equipment. Additionally, the amount you choose to pay upfront as a down payment will also influence the loan offer you receive.
Your ability to secure favorable terms will largely depend on your business’s creditworthiness, financial health, and the lender’s policies. Some lenders may be more flexible and willing to finance the entire cost of the equipment, while others might require a substantial down payment.
Ultimately, the combination of these factors will determine whether you can obtain a loan that fully covers your equipment purchase, allowing you to equip your business without significant upfront costs.
Interest Rate
Obtaining funds to grow your business always comes with costs, and when it comes to equipment loans, lenders primarily communicate these costs through interest rates.
An interest rate is the primary factor that determines the cost of borrowing money. It signifies the percentage of the loan amount charged by the lender, excluding any additional fees. This rate is crucial when using a business equipment loan calculator to estimate your monthly payments.
It’s essential to distinguish between an interest rate and an APR (Annual Percentage Rate). While the interest rate represents the cost of borrowing, the APR encompasses the interest rate plus any additional costs and fees over a 12-month period. The APR provides a more comprehensive view of the total borrowing costs, including upfront fees and other charges that may apply throughout the loan term.
Loan Term
Essentially, a loan’s terms outline crucial details such as the repayment duration, the frequency of payments, and the mutual obligations between borrower and lender.
When determining the loan term, lenders consider both the financial needs of the business and their own lending criteria. Once set, the term and the number of monthly payments typically remain fixed unless there is an early repayment. Payment frequencies can vary, usually monthly, depending on the lender and the specific qualifications of the business.
Furthermore, the loan term clarifies the rights and responsibilities of each party involved and provides a roadmap for handling any issues that may arise during the loan agreement. It serves as a legal framework that governs the relationship between borrower and lender, ensuring clarity and consistency throughout the lending process.
Using the Equipment Loan Payment Calculator: An Example
Imagine your construction firm is expanding and needs additional heavy equipment. You’ve found a promising deal on a bulldozer priced at $60,000, but your current budget can’t cover such a significant expense.
Luckily, your construction company has secured partial approval from an equipment financing firm to finance a portion of the equipment cost. Now, let’s use our machinery and heavy equipment loan calculator to calculate the total payment your company will need to make.
With a 75% loan approval for the $60,000 bulldozer, your approved loan amount is $45,000 (this is the amount you should input into the construction equipment loan calculator). This tool will help you estimate your monthly payments based on the loan amount, interest rate, and term, allowing you to plan your finances accordingly for this important equipment purchase.
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Total Cost of Bulldozer:
$60,000
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Loan Amount:
$45,000
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Amount Not Covered by Loan:
$15,000
The lender has set a 13% interest rate for a 24-month loan term on the financed amount of $45,000.
Using our heavy equipment financing calculator, we calculate a monthly payment of $2,139.
Over the 24-month period, this amounts to a total payment of $51,336. Subtracting the original loan amount from this total, we find that we would pay $6,336 in interest over the life of the loan.
This breakdown allows us to understand the total cost of financing the bulldozer, including both the principal and the accrued interest, helping us make informed decisions about managing our construction firm’s finances.
The Final Calculation on Equipment Loan Repayment Calculators
Estimating the total cost of an equipment loan can present challenges, but our equipment loan calculator simplifies this process. By entering your loan amount, estimated interest rate, and term, you can gain a clearer understanding of your expected payments.
At iBusinessLender, we offer detailed information about equipment loans. Whether you have questions about your loan offer or need assistance interpreting the results from our equipment finance calculator, our team of experienced business advisors is here to help. Feel free to reach out to us for personalized guidance tailored to your specific financing needs.
