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Know the Costs of Your Equipment by Accessing an Equipment Leasing Calculator

Posted On: May 5, 2018 author Paul Kendall

Manage Your Budget with an Equipment Lease Calculator

What better way to determine costs than an equipment leasing calculator? The benefits are tremendous because you do not have a person right in front of you pressuring you. You also have the ability to change numbers in the equipment leasing calculator to see what terms are going to be best for your business and how these numbers will allow you to control your costs.

The simple calculation formulas make it possible for anyone to determine what the rates for their lease are going to be. When you do your research and determine the standard interest rates, you input that data into your equipment leasing calculator and you will be aware of the numbers even before you deal with the finance company. Having that type of control helps during the discussion of terms for the lease.

Try to decide early on when shopping for monthly equipment lease payments, if total out of pocket cost or a lower monthly payment is more important to you. If your total net cost is more important to you, than go with a twenty four or thirty six month equipment lease term and budget to pay off the equipment lease sooner than later. In my equipment finance experience a 36 month equipment finance agreement is the smartest decision for most equipment loans. You get a manageable monthly  lease payment and you're paying down the principal of the loan in a good amount of time keeping your net cost lower. If you structure it as an operating lease, term residual lease or FMV lease you would get a great tax write off for two to three years as well. 

Your equipment leasing calculator will also allow you to enter different lengths for your lease. With this advantage you can determine monthly costs as determined by time. Obviously the longer the lease term, the lower the monthly payments will be, but you will pay more in interest with the longer lease. Balancing out what you can afford and what you want to pay can help control total costs on your lease, and you can have a good idea of those numbers before you even speak with an equipment financing company.

Equipment Leasing Calculators Gives You Clarity

When you are ready to begin looking into leasing equipment, the best way to start is to locate an online equipment leasing calculator to make sure you keep your net cost down. Financial calculators allows you to determine the amount that you need to borrow, what the interest rate is, and what payment breakdowns you can expect. These methods allow you to quickly conclude what your needs are and if it is possible for you to afford new equipment.

By accessing this information on an equipment leasing calculator, you can be aware of the wide range of numbers that you will be discussing with an equipment financing company. It will also allow you to determine if you are receiving a good deal on the lease terms that are being presented to you. Knowledge will allow you to be able to lease equipment and not burden your business with unexpected expenses and keep your net cost on the equipment as low as possible.  

Once you have all of the information that you need, such as the equipment picked out so you know the equipment cost, that is when you approach an equipment finance company. The equipment leasing calculator will prepare you for the meeting that you will have. If the numbers do not match what you have calculated, then ask to see their numbers and breakdown. Obtaining favorable finance terms and equipment finance rates are in yours and your company’s best interest in the long run. Paying too much on a piece of equipment may not balance out with the increase in revenue by adding that equipment. Consult with the equipment finance rep on which end of term buy out option would meet your financial goals. 

Equipment Lease vs. Paying Cash

The differences between equipment leasing and paying cash are fairly basic, but the costs can be vastly different. Utilizing an equipment leasing calculator will show you an amortization schedule so you can see how much you might owe if you buy out with no pre payment penalty on an equipment financing agreement with an equipment financing company that has no pre payment penalty. You will be able to determine all the costs of an equipment lease, monthly payments, and even what kind of adjustments you can make by shortening or lengthening the equipment lease. Determining what is best for your company should be your number one priority.

When you look at these two options, know that a purchase will require a larger down payment or security deposit by your company in order to order the equipment and establish terms with your vendor for the purchase of the piece of equipment. In an equipment lease, the equipment leasing company will advance your equipment vendor the money to order the equipment. Typically you will be charged pre fund interest, interim rent or some sort of carrying costs if you wish to pause your payments until a month after your equipment is installed and delivered. 

If you feel that a cash purchase is better for your company, then that’s great! Knowing what you want and exploring your options with the equipment leasing calculator is valuable because it shows you the differences in costs. Projecting costs and budgets with a financial calculator are important so that you do not make unwise financial decisions for your company and place financial burdens on your company. Eliminating the stress of the unknown is exactly the purpose of an equipment leasing calculator.

My favorite equipment leasing calculator tool is the HP 10BII.  If you want to get really fancy and spend a lot more money you can invest in TValue software. 

Control Your Purchase and Understand the Equipment Lease Terms

Once all of your plans are made and you have done your proper research with an equipment leasing calculator, then you are ready to face the equipment finance company. Whether you fill out an online equipment financing application or go into the office face to face, you will be prepared with all of the knowledge you will need to properly deal with the terms of the lease. When you have the knowledge to begin with, you can better negotiate the terms with the finance company to benefit your company and its overall interests.

Knowing the details with the equipment leasing calculator can also prepare you for determining how you will be able to afford and justify the new piece of equipment. By adding equipment, it will allow you to increase business, but the most important question will be whether the new equipment will bring in enough revenue to cover the cost of the monthly equipment lease payment. If the monthly payment numbers add up and you are going to be able to cover the equipment lease payment and increase your revenues to grow your business, then you are making a good business decision to grow your company.

Using an equipment leasing calculator gives you power that previous business owners did not have. You have at your fingertips a powerful amount of information to determine whether increasing your businesses revenues with new equipment is viable or not. Sometimes businesses are saving money  with financing software.

With a financial calculator you can see all the monthly payment lease terms, interest rates, and costs that will be incurred with your equipment lease. The equipment leasing calculator provides you with the tools to explore all aspects of the equipment leasing process to find the most favorable rates for your company.

How Do I Calculate My Equipment Lease Interest Rate?  

Use this equipment lease interest rate calculator to calculate what your annual percentage rate is on your equipment lease agreement. This  equipment lease calculator computes the equipment lease interest rate based on a known payment amount, lease funding amount, residual amount, and equipment lease term. Your equipment leasing calculator will also allow you to enter different lengths for your lease. With this advantage you can determine monthly costs as determined by time.

Final Thoughts On Knowing The Net Costs of Your Equipment By Accessing an Equipment Leasing Calculator

Decide early on in the acquisition process what your monthly payment budget is for bringing in the new piece of equipment. This will help you decide if you can go for a lower term. Decide early on if an operating lease or equipment loan will provide the best tax benefits for your company. 

If you want in on one of the equipment finance industries best kept secrets. Here it is....  Other than just putting down a big down payment to offset your finance costs. Set up your equipment lease with declining monthly payments. You will lower your net cost drastically.

Here's how it looks. Your equipment lease payments will be higher the first 12 months, then lower the next 12 months and then lower the final 12 months on a 36 month lease. You're paying down the principal of the equipment loan earlier on. This is the smartest way to finance your equipment, if you plan to own the equipment at the end and want your net equipment ownership cost to be low while taking advantage of less up front out of pocket cost to obtain the profit generating equipment.

Equipment lease companies generally ask for just one monthly lease payment up front and can even defer the first payment for 30-90 days while you ramp up. 

You will need to discuss this special declining payment structure with an equipment finance expert. 

Our Financial calculators will help you calculate a monthly lease payment, equipment lease APR interest rate, and see how much equipment you can afford to buy, by knowing how much you can afford to spend monthly. 

Once you're ready to take the next step towards a no obligation equipment leasing approval.

We invite you to call Trust Capital at 866-458-4777 our equipment loan specialist have integrity and will be transparent with you from the beginning til the end. 

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