How to Use The Equipment Loan Calculator
Estimate Monthly Payment
Estimate How Much You May Qualify For
Terms and Explanation
How to Calculate Payments
Steps You Can Take to Reduce Equipment Loan Costs
Estimate Monthly Payments
To make the best use of our business equipment loan calculator, however, you’ll need a few additional pieces of information. The calculator requires the following:
- Amount seeking
- Loan term
You’ll also be able to see an Annual Percentage Rate (APR) to compare costs. Total interest can be calculated by subtracting fees from the total financing cost.
Estimate How Much You May Qualify For
You can also estimate how much you may qualify for if you take out a business equipment loan. Once you fill out your information, the calculator will give you a range of dollar figures in which you may be able to borrow. This will give you an idea of the types of expenses you may cover and whether or not you might need to seek additional financing elsewhere. The inputs for this calculator include:
Business Start Date
This is the month and year your business officially started operations.
Annual Revenue
This refers to the total amount of money your business makes during a 12-month period.
Last Month’s Deposits
Last month’s deposits show how much money you deposited into your business bank account in the previous month.
Estimated Credit Score
This is where you select your business’ estimated credit score.
Terms and Explanation
Here are the essential pieces of information you’ll need to enter and notice as outputs on our business equipment loan calculator.
Amount Seeking
The amount seeking is how much you’d like to borrow when you take out an equipment loan. Most lenders will let you finance anywhere from 80% to 100% of the equipment’s value. It may be helpful to have an invoice or quote for the piece(s) of equipment you’re looking to purchase.
Loan or Lease Term
Loan term refers to the length of time it will take you to completely pay off your equipment loan. This may range from a few years to 10 years or longer, depending on the lender and the type of equipment loan.
Annual Rate
Annual rate is the yearly price you’ll pay to borrow money. It includes interest rate and fees.
Estimated Monthly Payment
Estimated monthly payment will tell you how much you’ll pay each month to pay back your equipment loan. Equipment lease terms, pricing, and structure may vary.
Total Repayment
Total repayment will explain the total cost of your equipment loan, including principal, interest, and fees.
Estimated Monthly Payment
This is the amount you’ll owe your SBA-approved lender each month. It includes payment toward your principal, interest, and guarantee fee, if applicable.
Total Repayment
Total repayment tells you the total amount of money you will have paid over the life of your SBA loan.
Estimated One-Time Fees
This will show you how much you may pay in one-time SBA fees, expressed as a dollar amount.
Estimated Down Payment
This will explain how much you will pay for a down payment, expressed as a dollar amount.
How to Calculate Payments for Equipment Loans
To calculate payments on equipment loans, we’ll consider the following factors.
1. Loan Amount
Most lenders offer equipment loans that are 80% to 100% of the total cost of the equipment. You might need to show an invoice from the equipment manufacturer or company when you apply for an equipment loan.
2. Loan Term
Terms for equipment loans can vary greatly. While terms between two and seven years are the most common, longer terms do exist. A longer term will lower your monthly payments, but cost you more in interest in the long run.
3. Annual Interest Rate
Factors like your credit score and loan amount will impact your annual interest rate, which includes principal, interest, and fees. Rates for equipment loans typically range from 7% to 20%. To land a great rate, it’s important to shop around and compare your options.
Steps You Can Take to Reduce Equipment Loan Costs
Making your monthly minimum payments on time is the no-brainer way to save money while also boosting your credit score. Calendaring your due dates or setting up automatic payments can help you stay on schedule.
Some loan types or leases have prepayment penalties, while others will praise you for paying off your loan early and offer you a discount. Always ask about potential penalties and discounts so you can choose a repayment schedule that fits your budget and timeline.
Again, there are a lot of maybes here because every lender is different. Put these items on your checklist, and your funding manager can answer any questions about your repayment strategy.
