Equipment loan calculator: price one machine three ways before you sign
An equipment quote has three numbers that matter to your business: the monthly payment, what the financing costs in total, and how much cash leaves your account on the day you sign. This worksheet works out all three for a specific purchase, so two equipment financing offers can be lined up on the same footing.
By Clario Capital Team · Published
Why a general loan calculator is not enough here
A plain loan calculator asks for an amount, a rate and a term. Equipment deals rarely arrive that tidy. One lender wants a down payment, another finances the full price but adds a lump sum at the end, a third will roll the installation into the loan while a fourth will not. Tax sits on top of the invoice and somebody has to pay it. If you only compare the monthly payment, the offer with the smallest number can easily be the one that costs the most.
So this page starts from the purchase, not the loan. You describe the equipment project once (price, extras, tax), then lay each offer over the same project. Anything the lender does not finance shows up as cash you need at signing. Anything it finances shows up in the cost. Nothing slips through the gap. If you want to compare a general loan against a factor-rate advance instead, our business loan calculator is built for that job.
The worksheet
Print this, copy it into a spreadsheet, or jot the lines on paper. Fill in one column per offer, using the written offer itself rather than a phone summary. Lines 1 to 4 should be identical across offers. If they are not, you are comparing two different purchases.
| Line | What to enter | Where it comes from | Offer A | Offer B |
|---|---|---|---|---|
| 1 | Equipment price before tax | From the vendor quote. Same machine, same options, for both offers. | ______ | ______ |
| 2 | Delivery, installation and training | Often quoted separately. Ask whether the lender will finance them or not. | ______ | ______ |
| 3 | Sales tax on the purchase | Use the tax shown on the vendor invoice for your province and item. | ______ | ______ |
| 4 | Total project cost | Line 1 + line 2 + line 3. This is the same for every offer. | ______ | ______ |
| 5 | Down payment the lender asks for | A dollar amount or a percentage of line 1. Can be zero. | ______ | ______ |
| 6 | Fees paid at signing | Documentation, registration, origination or admin fees from the written offer. | ______ | ______ |
| 7 | Amount financed | Whatever the lender is actually lending. Check it against lines 1 to 5. | ______ | ______ |
| 8 | Rate, term and payment frequency | Annual rate, number of payments, monthly or other rhythm. | ______ | ______ |
| 9 | Balloon, residual or buyout at the end | Any lump sum due after the last regular payment. Zero if none. | ______ | ______ |
| 10 | Regular payment | From the offer, or the spreadsheet formula below to check it. | ______ | ______ |
| 11 | Cash needed at signing | Parts of line 4 not financed + line 6 (+ first payment if paid in advance). | ______ | ______ |
| 12 | Total of payments plus balloon | Line 10 times the number of payments, plus line 9. | ______ | ______ |
| 13 | Financing cost | Line 12 minus line 7, plus line 6. | ______ | ______ |
| 14 | Total out of pocket | Line 4 + line 13. The full price of owning the equipment this way. | ______ | ______ |
Checking the payment yourself
Lenders quote the payment, but it is worth confirming that the payment matches the rate, term and balloon written in the agreement. Any spreadsheet will do it with one formula:
- No balloon:
=PMT(annual rate / 12, number of months, -amount financed) - With a balloon:
=PMT(annual rate / 12, number of months, -amount financed, balloon) - First payment due at signing: use
=PMT(annual rate / 12, number of months, -amount financed, balloon or 0, 1). The final1moves each payment to the start of the month. Check whether your offer asks for the first payment at signing, because that changes both the payment and your cash at signing.
Plugging in the illustrative offers below, =PMT(0.09/12, 60, -72000) returns about $1,494.59 and =PMT(0.11/12, 48, -80000, 16000) returns about $1,800.78. If your own result is noticeably different from the payment in the offer, ask the lender what is included, for example whether a fee, an insurance charge or a different rate is built in.
A worked example: one $80,000 machine, two offers
Here is an illustrative project and two illustrative offers. The equipment, rates and fees are made up to show how the worksheet behaves. They are not quotes and do not reflect what any lender would offer you.
| Illustrative example | Offer A: loan with down payment | Offer B: full financing with balloon |
|---|---|---|
| Equipment price before tax | $80,000 | $80,000 |
| Delivery and installation | $2,400 | $2,400 |
| Sales tax (illustrative) | $9,600 | $9,600 |
| Total project cost | $92,000 | $92,000 |
| Down payment | $8,000 | none |
| Fees paid at signing | $500 | $750 |
| Amount financed | $72,000 | $80,000 |
| Rate, term | 9% a year, 60 monthly payments | 11% a year, 48 monthly payments |
| Balloon at the end | none | $16,000 |
| Monthly payment | about $1,495 | about $1,801 |
| Cash needed at signing | $20,500 | $12,750 |
| Payments plus balloon | about $89,680 | about $102,440 |
| Interest alone | about $17,680 | about $22,440 |
| Financing cost with fees | about $18,180 | about $23,190 |
| Total out of pocket | about $110,180 | about $115,190 |
What the numbers say
Offer B looks easier at the start: $12,750 at signing instead of $20,500, because there is no down payment. But its monthly payment is about $306 higher, it runs a year shorter, and it ends with a $16,000 lump sum. Across the whole deal it costs about $5,010 more than Offer A.
That does not make Offer A the winner by default. If spending $20,500 today would leave the business thin on cash for payroll or stock, the extra cost of Offer B might be a fair price for keeping that cushion. The worksheet does not choose for you. It makes sure you are choosing between real numbers.
Putting them on equal assumptions
These two offers are not the same shape, so a few adjustments help before you decide:
- Plan the balloon. Will you pay the $16,000 from savings, refinance it, or hand the equipment back? Each choice has a different cost. If you would refinance, that is a second loan whose terms nobody has offered you yet.
- Match the term to the machine. The Competition Bureau notes that term loans often have an amortization aligned to the useful life of the asset. If the equipment will be worn out in four years, a five-year payment schedule means paying for something you no longer use.
- Price the cash. Offer A ties up an extra $7,750 at signing. Ask what that money would otherwise do in your business, and whether you would need to borrow it back later at a higher price.
- Look past the stated rate. Fees paid at signing raise the true cost of each offer above the headline rate. Section 347 of the Criminal Code, which sets the criminal interest rate, counts fees, penalties and similar charges as part of interest, which is a useful reminder that the rate printed on page one is rarely the whole price.
Loan or lease: same worksheet, different questions
The Competition Bureau describes lease financing as making regular payments for the use of an asset for a set period. On the worksheet, a lease fits in the same columns: the lease payment goes on line 10 and any purchase option or residual at the end goes on line 9. What changes is ownership. Ask each provider:
- Who owns the equipment during the term, and what it costs to own it at the end.
- Whether the end-of-term amount is a fixed figure or based on the equipment’s value at that time.
- Who pays for insurance, maintenance and repairs while the agreement runs.
- What happens if you want to upgrade, sell the business or pay the agreement off early.
How a lease or a loan is treated for tax purposes is a question for your accountant. Bring the filled-in worksheet to that conversation, since it already lays out what each structure costs.
The terms a calculator cannot price
Two offers with the same total cost can still carry very different risk. Read these sections of each agreement before you rank them:
- Security. Is the lender’s claim limited to the equipment, or does it reach other business assets?
- Personal guarantees. Studies cited by the Competition Bureau found that more than half of business owners had been required to provide a personal guarantee to secure a loan in the past three years, with one in four pledging their primary residence. Know exactly what you are signing for personally.
- Prepayment. Can you pay early, and does it save interest or trigger a penalty?
- Default and repossession. How many missed payments before the lender can act, and what you would still owe after the equipment is sold.
For a full scorecard that goes beyond cost, see how to compare business loan offers.
Getting real offers to fill in
The worksheet is only as good as the offers you bring to it. Clario Capital is not a lender. Lenders set approval, rates and terms, and nothing is guaranteed. Offers from our lender network cover equipment financing as well as term loans, business lines of credit, working capital and revenue-based financing, though not every business will see every product. One application is shared with our lending partners so you can compare competing offers, and each lender sets its rate based on your credit, business performance and terms.
For most industries, lending partners look for about 6 months of trading history, monthly turnover of at least $15K, a credit score of 560 or higher and a business registered in Canada. Those are review criteria, not a promise: meeting them does not mean approval. Our service is free, with no fees to apply or to receive offers from Clario, though individual lenders may have their own fees, which are disclosed and belong on line 6. Comparing carries no obligation. You commit only if you choose an offer. You can read how Clario works or start one application when you have your equipment quote in hand.
Sources
This guide is general information for Canadian business owners, not financial, legal or tax advice. Clario Capital is not a lender. Funding approval, rates and terms are not guaranteed and are set solely by our lending partners. Any examples are illustrative. The actual lender written terms govern any offer you receive.