The purchase of business equipment can be a major consideration and require planning and budgeted. Knowing what your repayments on your equipment finance may be, before you commence the purchase or the finance process may be of great assistance to many businesses.
An Equipment Finance Calculator can be used for that purpose as it allows businesses to calculate a rough ballpark estimate on monthly repayments for equipment finance. The calculators are an online function, available on the websites of most providers of equipment finance and quick and easy to use.
You will find an Equipment Finance Calculator on most bank, finance broker and business lender websites. Using one is easy but utilising the result properly requires an understanding of limitations of the resource.
Using an Equipment Finance Calculator
Each calculator may have its own unique features but most follow a standard online form format and layout with fields where you type in data, ie amounts for your loan.
- Equipment Loan Amount: enter the total amount of your loan in this section. The amount might be 100% of the purchase price, the price less any deposit you may choose to pay, or the price plus and additional expenses incurred in the purchase such as installation and commissioning.
- Loan Term: this may be represented as months or years. Select the timeframe you would like to pay off the loan. Some equipment loans are available for up to 7 years/84 months.
- Interest Rate: the website should indicate the current interest rate being offered on equipment finance by that lender. Enter that amount for the purpose of this calculation.
- Balloon/Residual/Payout: equipment finance products allow an option for an amount of the loan to be paid as a lump sum at the end of the loan term. For Chattel Mortgage and CHP it is a balloon, for leasing it is a residual and for rent-to-own it is a payout.
- Ensure all fields have been completed. Some calculators will request additional details and essential fields (information) indicated with a red asterisk.
- Finally, simply click on CALCULATE and a repayment figure will appear.
- If you would like a higher or lower repayment, vary the loan amount or loan term and click calculate again, and you’ll see how those changes affect the repayment.
- To compare different prices of equipment say from different manufacturers or different models, just enter the different amounts and you’ll see how that changes the repayment estimate.
This is a great resource for planning but must be used with caution
- No allowance is made for the fees and charges which equipment finance attracts from different lenders. These would be extra.
- The interest rate that you are actually offered, may be higher or lower than the one advertised. Your finance broker may be able to negotiate you a better rate which will affect the repayment.
- Using such a device is not a loan application, it is not an offer of a quote or a loan approval. It is purely a rough ballpark estimate to be used for planning and general information purposes.
- Read the disclaimer and terms and conditions relevant to the calculator you are using.
Used correctly and for the purpose intended, an Equipment Finance Calculator is a very useful resource for many business in making decisions around major equipment purchases.
To find an Equipment Finance Calculator that you can use, connect with us. Business.finance can connect you with a calculator to calculate a rough estimate on your proposed equipment purchases.
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