Equipment Lease Calculator
Lease payment and lease vs buy comparison.
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This equipment lease calculator works out the monthly payment on a business equipment lease from the equipment cost, the residual value at the end, the lease rate and the term. It handles payments in advance or arrears, an upfront fee and sales tax on payments, shows the equivalent money factor, and compares the total cost of leasing with buying on a loan at the same rate.
What is a Equipment Lease Calculator?
An equipment lease lets a business use machinery, vehicles, computers or medical equipment for a set term in exchange for regular payments, instead of buying it outright. At the end, the business may return the equipment, renew the lease or buy it for its residual value.
The payment depends on the cost, the residual value expected at the end, the lease rate and the term. Payments are often due at the start of each month (in advance), which slightly lowers each payment. This equipment lease calculator works out the payment and compares the cost with buying on a loan.
How does the Equipment Lease Calculator work?
The calculator treats the lease as a loan that is paid down to the residual value: it takes the cost minus the present value of the residual, spreads it over the term at the monthly rate, and adjusts for payments in advance. It also shows the money factor (annual rate ÷ 2,400), the payment on a loan to buy the equipment, and the net cost of buying after selling it for the residual value.
How to use the Equipment Lease Calculator step by step
- Choose your currency.
- Enter the equipment cost.
- Enter the residual value percentage and term.
- Enter the lease rate and payment timing.
- Add any upfront fee and sales tax.
- Compare the lease with buying.
Equipment Lease Calculator example with real numbers
A dental practice wants to lease a $50,000 imaging machine for 36 months at 8%, with a 10% residual value and payments at the start of each month.
| Example input | Value |
|---|---|
| Currency | US dollar ($) |
| Equipment cost | 50,000 |
| Residual value at end (of cost) | 10% |
| Lease term | 36 months |
| Lease interest rate (yearly) | 8% |
| Payments made | In advance |
| Upfront fee (optional) | 0 |
| Sales tax on payments (optional) | 0% |
| Example output | Value |
|---|---|
| Monthly lease payment | $1,433.91 |
| Payment before tax | $1,433.91 |
| Residual value | $5,000 |
| Money factor | 0.00333 |
| Total lease cost (payments + fee) | $51,621 |
| Loan payment to buy instead | $1,566.82 |
| Buying: payments minus resale value | $51,405 |
| Lease vs buy difference | Buying cheaper by $215 |
The equipment lease calculator shows a monthly payment of $1,433.91. Buying with a loan at the same rate would cost $1,566.82 a month.
Key features of this Equipment Lease Calculator
- Residual value
- Advance or arrears payments
- Money factor
- Lease vs buy comparison
- 8 currencies
Who should use the Equipment Lease Calculator?
Who is this Equipment Lease Calculator for?
- Small business owners
- Medical and dental practices
- Construction and farming businesses
- IT managers
Practical use cases
- Checking a leasing quote
- Comparing lease terms
- Deciding to lease or buy
- Budgeting monthly costs
Key benefits
- Clear: payment and total cost.
- Decision help: lease vs buy.
- Flexible: timing, fees and tax.
- Private: runs in your browser.
Tips for better results
- Ask the lessor for the rate or money factor, not just the payment.
- A higher residual lowers payments but may mean a larger buyout.
- Check maintenance and insurance responsibilities.
- Compare tax treatment with your accountant.
Common mistakes to avoid
- Comparing payments without the term and residual.
- Ignoring end-of-lease fees.
- Forgetting tax on payments.
- Leasing equipment you will use for many years beyond the term.
Limitations of this Equipment Lease Calculator
- Taxes and depreciation benefits are not modelled.
- Assumes level monthly payments.
- Resale value is assumed equal to the residual.
Equipment Lease Calculator vs other ways to calculate
| Option | Pros | Cons |
|---|---|---|
| Lease | Low upfront cost, upgrade easily | Higher total cost over long use |
| Loan to buy | You own it, resale value | Higher upfront cost |
| Pay cash | No interest | Ties up working capital |
For vehicles, see the car lease calculator. For business loans in India, use the business loan EMI calculator.
Privacy and data handling
This Equipment Lease Calculator runs entirely in your browser. The numbers you type are not sent to Qorico or stored on any server, and nothing is saved after you close the page. The Copy and Download buttons create the result on your own device. If the page has analytics turned on, it may count that a calculation happened, but it does not record the values you entered.
Equipment Lease Calculator FAQs
How is a lease payment calculated?
The cost minus the present value of the residual is spread over the term at the lease rate, like a loan.
What is residual value?
The expected value of the equipment at the end of the lease.
What is a money factor?
The lease rate expressed as a decimal; multiply by 2,400 to get an approximate yearly rate.
Lease or buy equipment?
Leasing suits equipment that becomes outdated quickly; buying suits long-lived equipment. Compare the totals.
What does payment in advance mean?
The first payment is due at the start of the lease, so each payment is slightly lower.
Are lease payments tax-deductible?
Often yes for operating leases, but rules differ by country and lease type.
Related tools
Sources and references
We checked the method and the current figures used in this Equipment Lease Calculator against these official and primary sources:
- U.S. Small Business Administration
- SBA: Manage your business (finances)
- IFRS Foundation: IFRS 16 Leases
- SIDBI: Small Industries Development Bank of India
Written and reviewed by the Qorico Team
