Tealford Business Capital, a funding service in Houma, Louisiana, provides this equipment payment calculator for reading lease quotes. Enter a price, down payment, annual rate and term to get the monthly payment, total interest and total cost, then divide the payment by the price to get a lease rate factor. The page also explains money factors, lease versus buy, and loan payments.
Lease Rate Factor Calculator: What It Works Out
The calculator does loan arithmetic: it spreads a price, less any down payment, into equal monthly payments at the rate and term entered. A lease quote often states a lease rate factor instead of a rate: the monthly payment divided by the equipment's cost. Dividing the calculator's payment by the price turns its result into the same kind of factor, so a quoted factor and a loan offer can be set side by side. Nothing entered is sent anywhere.
Reading a Lease Rate Factor, With Numbers
Illustration only, invented figures: a lessor quotes $1,146 a month on a $52,000 welding positioner. The factor is $1,146 divided by $52,000, about 0.0220 (our arithmetic). A second invented quote of $1,098 a month on the same machine has a factor of about 0.0211. On the same term and end-of-lease terms, the lower factor costs less each month.
Enter the same $52,000 price with no down payment, an invented 9.0% annual rate and 60 months, and the calculator returns about $1,079 a month, a factor of about 0.0208 (our arithmetic). That lets a lease quote be compared with a loan offer.
Lease vs Buy Equipment Calculator: What to Add Beyond the Payment
- The end-of-lease option: one-dollar buyout, fair market value or return.
- Fees at signing and at the end of the lease.
- Who pays insurance, maintenance and taxes during the term.
- Resale value of the machine at the end, for a purchase.
- Tax treatment of each option, from a tax adviser.
A lease with a low factor and a large end-of-term purchase price can cost more in total than a loan; add every payment and the buyout before comparing.
Money Factor Rate Calculator: A Car-Lease Term Explained
A money factor is a car-leasing convention: the lease charge expressed as a small decimal. Multiplying it by 2,400 gives an approximate annual rate. Illustration only, invented figures: a money factor of 0.0042 corresponds to roughly 10.1% a year (our arithmetic). Equipment leases more often state a lease rate factor, which already includes principal and charge in the monthly payment, so the two numbers are not interchangeable.
Small Business Loan Calculator Steps, Applied to a Machine
- Enter the price from the seller's quote.
- Enter any down payment.
- Enter the annual rate from an offer, or a rate to test.
- Enter the term in months.
- Read the payment, the total interest and the total cost.
For a working capital or term loan, enter the loan amount as the price and leave the down payment blank.
Business Loan Calculator Online: Reading the Three Results
The monthly payment is what the business pays each month. Total interest shows what borrowing costs across the full term. Total cost adds the down payment, the payments and nothing else; fees in a real offer come on top. Test a shorter and a longer term to see the trade-off: shorter terms raise the payment and lower the total interest.
Business Loan Calculator Monthly Payment, Set Against Income
Set the payment against what the machine earns or saves each month. A machine that adds billable hours, replaces rental charges or cuts repair bills can carry its payment from that change. The equipment financing page covers requests, and term loans cover purchases a machine cannot secure.
By Tealford Business Capital · Updated