Equipment Loan Calculator: Monthly Payment & Total Interest
Work out the monthly payment and total interest on a loan to finance business equipment — machinery, vehicles, or technology.
Adjust the inputs and select Calculate for a full breakdown.
Year-by-year amortization schedule
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Monthly payment | Total interest | Total of payments |
|---|---|---|---|
| $50k · 9.0% · 5-year | $1,037.92 | $12,275.07 | $62,275.07 |
| $20k · 10.5% · 3-year | $650.05 | $3,401.76 | $23,401.76 |
| $150k · 8.0% · 7-year | $2,337.93 | $46,386.30 | $196,386.30 |
| $80k · 9.5% · 6-year | $1,461.98 | $25,262.22 | $105,262.22 |
How This Calculator Works
Enter the amount financed — the equipment cost after any down payment — the APR, and the loan term. The equipment usually secures the loan. The calculator applies the fixed-rate amortization formula to produce one constant monthly payment and a full year-by-year breakdown.
The Formula
Fixed-Rate Amortization
P = loan amount, r = monthly rate (APR ÷ 12), n = number of monthly payments
Worked Example
Financing $50,000 of equipment at 9% APR over 5 years gives a monthly payment of about $1,038. Across the loan you repay roughly $62,280, so interest adds close to $12,280 to the equipment's cost.
Key Insight
Match the loan term to the equipment's useful life. Financing a machine over five years when it will serve for ten spreads the cost sensibly; financing it over ten years when it lasts five means paying for equipment after it is gone.
Lease vs buy — the tax-driven choice
Equipment can be acquired through purchase (loan-financed) or operating lease. Tax treatment differs substantially. Purchase: business owns equipment; depreciates over useful life (5-7 years typical) or takes Section 179 immediate deduction (up to $1.16M in 2024); pays interest on loan (deductible).
Operating lease: lessor owns equipment; business pays lease payments (fully deductible as operating expense); no depreciation deduction (lessor takes it); returns equipment at lease end or buys at residual.
Decision factors: (1) Tax bracket — higher bracket favors purchase + Section 179 (front-loaded deduction worth more at higher rate); (2) Cash availability — lease preserves cash; purchase ties up capital. (3) Equipment lifecycle — long-lived equipment (5+ years) favors purchase; rapidly obsolescing (3 years) favors lease.
(4) Use case — equipment central to business operations favors purchase (ownership and customization); equipment supporting operations favors lease (flexibility to upgrade). Most U.S. small businesses do mix: purchase core equipment, lease supporting equipment.
Section 179 — the equipment tax shield
U.S. tax code Section 179 allows businesses to immediately deduct equipment purchases (up to $1.16M in 2024) rather than depreciating over useful life. For a $100K equipment purchase by business in 35% tax bracket: $100K × 35% = $35K tax savings in year of purchase.
Combined with bonus depreciation (60% in 2024, phasing down to 40% in 2025, 20% in 2026, 0% in 2027 absent legislative renewal): substantial portion of equipment cost can be deducted immediately even above Section 179 limit.
For loan-financed purchases: the tax deduction is for the EQUIPMENT (full cost), not the cash outlay. Buying $100K equipment with 80% loan ($20K cash, $80K loan) still produces $35K Section 179 tax savings in year 1. Effective cash cost: $20K outlay − $35K tax savings = NEGATIVE $15K (i.e., business gets net cash benefit in year 1 despite the equipment purchase). This is a major reason equipment financing is so attractive for profitable businesses.
Equipment financing sources and terms (2024)
Reference equipment financing sources and typical terms.
| Source | Typical APR | Term | Notes |
|---|---|---|---|
| SBA 7(a) for equipment | 8-12% | Up to 10 years | Government guarantee |
| Bank equipment loan | 7-11% | 3-7 years | Strong financials required |
| Equipment dealer financing | 0-10% | 3-7 years | Sometimes 0% promo |
| Crest Capital, Balboa | 8-15% | 3-7 years | Specialized equipment lenders |
| Online (Lendio, Currency, etc.) | 10-25% | 1-5 years | Faster, easier qualification |
| Operating lease | Equivalent to 8-15% effective | Variable | Tax-deductible operating expense |
| Capital lease | Equivalent to 7-13% | Variable | Treated like purchase for tax |
Equipment dealer 0% promotional financing is genuinely 0% (dealer absorbs cost as sales tool). For substantial equipment purchases with dealer 0% available, this is the cheapest financing path. SBA and bank loans are next-cheapest for prime borrowers. Online lenders offer speed at premium rates.
Frequently Asked Questions
Is an equipment loan secured?
Usually yes — the equipment itself serves as collateral. That keeps the rate below unsecured borrowing but lets the lender repossess the equipment on default.
What term should an equipment loan have?
A common guideline is to match the term to the equipment's useful life, so the asset is still productive while it is being paid for.
What is the amount financed?
Enter the equipment cost after any down payment or trade-in. Taxes, delivery, and installation may be included if the lender finances them.
How does equipment financing differ from leasing?
A loan builds ownership and ends with the equipment yours. A lease is rental, often with lower payments but no ownership unless a buyout is exercised.
Can interest and depreciation be deducted?
Business loan interest and equipment depreciation are often deductible, sometimes with accelerated options. Confirm the current rules with a tax professional.
When is this calculator unreliable?
For equipment leases vs purchases (different tax treatment — purchase enables Section 179 + interest deduction; lease provides 100% operating expense deduction), when financing includes balloon payment at term end (common in some equipment leases), or when vendor subsidy creates artificially low promotional rate that doesn't reflect true cost of capital.
References & Authoritative Sources
- U.S. Small Business Administration (SBA) — Equipment Financing — Equipment Loan Programs · consulted June 1, 2026 · SBA equipment financing options
- Equipment Leasing and Finance Association (ELFA) — Industry Reports and Benchmarks · consulted June 1, 2026 · Industry trade association for equipment finance
- Internal Revenue Service (IRS) — Section 179 Equipment Depreciation · consulted June 1, 2026 · Federal tax treatment of equipment purchase and depreciation
Related Calculators
Data Sources & Benchmarks
This calculator draws on 3 independent, dated sources. The starting values for interest rate are taken from the benchmarks below and refresh whenever the snapshots are updated.
Methodology & Review
Equipment loan payment uses standard amortization formula. The calculator returns monthly payment. U.S. equipment financing 2024: typical 6-15% APR; 3-7 year terms; equipment as collateral (lender can repossess); often offered by equipment dealers (cap implant in equipment cost) or specialty lenders (Crest Capital, Balboa Capital, online platforms). Equipment depreciates faster than loan amortizes in early years, creating temporary negative equity. RELIABILITY: Reliable for fixed-rate amortizing equipment loans. Less reliable for non-traditional equipment financing structures: leases vs purchases (different tax treatment); balloon payments at term end; vendor-subsidized financing (rate is below market because vendor pays subsidy).
Updated