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Equipment Lease Calculator

Equipment lease calculator.

Compare $1 buyout (capital) vs. FMV (operating) lease payments, total cost, and Section 179 tax savings. Trucks, construction, medical, restaurant, manufacturing — same math, different residuals.

Monthly payment$3,113
Total paid$186,783
Total interest$36,783
Section 179 tax savings$42,000
How this works: $1 buyout leases finance the full equipment cost — at term end you own the asset and can take Section 179 (up to $1.16M in year one). FMV leases assume a ~15% residual that reduces the financed amount; payments are fully deductible. Confirm tax treatment with your CPA.
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See real equipment lease offers at $150,000.

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FAQ

Equipment lease calculator, answered.

How is an equipment lease payment calculated?+

Equipment lease payments use a money factor (lease rate) applied to the capitalized cost, plus a residual at term end. For a $1 buyout (capital) lease, the math mirrors a standard loan. For an FMV (fair market value) lease, the residual reduces the monthly payment because you don't own the asset at term end.

$1 buyout vs. FMV lease — which is cheaper?+

$1 buyout (capital lease) has a higher monthly payment but you own the asset at term end and can take full Section 179 depreciation. FMV lease has a lower monthly payment but you return the asset (or buy it at appraised value) at term end. $1 buyout wins on long-life assets; FMV wins on rapidly depreciating tech.

What's a typical equipment lease rate?+

A-paper (FICO 700+, established business, new equipment): 6.99–9.99%. B-paper (FICO 640–699): 10–15%. C-paper (FICO 580–639): 15–22%. Startup equipment leasing: 18–28%. Pricing also reflects equipment type — trucks and construction price tighter than restaurant or fitness.

Can I deduct equipment lease payments?+

FMV (operating) lease payments are fully deductible as a business expense in the year paid. $1 buyout (capital) lease deducts depreciation (often via Section 179 up to $1.16M in year one) plus the interest portion of payments. Talk to your CPA — the choice changes your tax position.

What's a money factor on an equipment lease?+

A money factor is the lease's interest cost expressed as a decimal (e.g., 0.0029). Multiply by 2,400 to get the APR equivalent (0.0029 × 2,400 ≈ 6.96%). Most equipment lessors quote APR or simple interest now — money factor is more common on vehicle leases.