Equipment Financing Calculator

Enter the total cost of the equipment you plan to purchase, your expected down payment percentage, the interest rate from your lender (or use the market range as a starting point), and the loan term. Optionally, select the equipment's expected useful life to see how financing costs spread over the full service period.

The calculator returns your monthly payment, total interest, total out-of-pocket cost, and a breakdown comparing what you pay to what the equipment costs. If you enter a useful life longer than the loan term, it shows how many months of payment-free use you get after the loan is paid off.

For a starting rate estimate, most equipment loans for qualified borrowers fall between 7.25% and 10.75%. Rates depend on your credit profile, the equipment type, and whether you choose a fixed or variable structure. The interest rate strategy guide explains how these factors interact.

Equipment financing differs from other commercial loan products in one important way: the equipment itself serves as collateral. This collateral security is why equipment loans typically carry tighter spreads than unsecured working capital financing. The lender can repossess and resell the equipment if the borrower defaults, which reduces the lender's risk and translates into lower pricing for the borrower.

The total cost of equipment financing has three components beyond the purchase price:

• Interest expense: The cumulative interest paid over the loan term. On a $150,000 equipment purchase financed at 8.50% over 5 years with 10% down, total interest is approximately $31,000. That represents about 23% of the financed amount added to the equipment's sticker price.
• Down payment: Typically 0% to 20% of the equipment cost. A larger down payment reduces the loan amount and total interest, but ties up cash that could be deployed elsewhere. The right balance depends on your debt service coverage and cash reserves.
• Opportunity timeline: Equipment generates revenue from the day it is deployed. A 5-year loan on equipment with a 10-year useful life means 5 years of payment-free operation after the loan is satisfied. Matching loan term to useful life is the standard approach, but paying off equipment faster than its useful life creates a built-in margin.

Equipment financing rates currently range from approximately 7.25% to 10.75%, reflecting both fixed-rate and variable-rate structures. The primary factors driving where a borrower lands within that range:

• Credit profile: Borrowers with FICO scores above 700 and strong business financials typically qualify for rates at or near the lower end. Scores below 650 push rates toward the upper end or into alternative lending channels.
• Equipment type: Standard commercial equipment with active resale markets (vehicles, manufacturing machinery, medical devices) commands better rates than specialized or rapidly depreciating equipment. Lenders assess liquidation value, not just purchase price.
• Loan structure: Fixed rates provide payment certainty but may carry a small premium over variable rates. Variable equipment loans are typically priced off Prime Rate (currently 6.75% ) plus a spread. See equipment financing overview for product details.

Terms typically range from 2 to 7 years, with some lenders extending to 10 years for high-value, long-lived equipment like commercial real estate fixtures or heavy machinery. The general rule: the loan term should not exceed the equipment's expected useful life. Lenders enforce this because they do not want to hold a loan secured by equipment that no longer has resale value.

SBA 7(a) loans can also finance equipment at competitive rates. For SBA 7(a) loans over $350,000, the maximum rate is Prime + 3.00% (currently 9.75% ). The SBA 7(a) calculator models those specific terms.