Loans · Business
Equipment financing calculator for Canada.
Put a loan and a lease side by side for the same equipment: monthly payment, interest, total cash out and what you keep at the end. Enter the quotes you have; the tool adds no rates.
The equipment
Loan versus lease
Method and limitations
Formulas: the loan payment is the amortization payment on cost minus down payment at the monthly rate r/12. The lease payment is (financed − V(1 + i)−n) × i / (1 − (1 + i)−n), where V is the end-of-term value the lessor expects; when payments are due in advance it is divided by (1 + i). Loan net cost is total cash out minus V, assuming you keep the equipment and it is worth V.
Worked example: $100,000.00 of equipment, $10,000.00 down, 60 months, $20,000.00 end value. Loan at 8%: $1,824.88 a month, $19,492.53 of interest, $119,492.53 cash out, $99,492.53 after the $20,000.00 you keep. Lease at 9%: $1,603.08 a month and $106,185.09 cash out if you return it, or $126,185.09 if you buy it out.
Rate statement: section 4 of the Interest Act limits interest to 5% a year on a written contract that sets the rate per month or another period under a year unless the contract states the equivalent yearly rate. Confirm your loan agreement shows an annual rate.
What this is not: taxes (including HST and capital cost allowance), insurance, maintenance, fees and residual-value guarantees are not modelled, and lease structures vary. The comparison is only as good as the end-of-term value you enter.
FAQ
How do I compare equipment leasing and financing?
Compare total cash out for each, then subtract what you keep. A loan leaves you the equipment; a lease either returns it or lets you buy it for the buyout price.
What is the monthly payment on $100,000 of equipment?
With $10,000 down over 60 months at 8%, the loan payment is $1,824.88. A lease with a $20,000.00 end value at 9% is $1,603.08. Both rates are examples.
Why is the lease payment lower?
It only has to repay the part of the cost you do not keep, so the end-of-term value comes off the amount being amortized.
What does payments in advance do?
Each lease payment is due a month earlier, which lowers the payment slightly for the same cost to the lessor.
Does the loan rate include fees?
No. If you pay fees, use the small business loan calculator to see the all-in rate.
Sources
- Interest Act, section 4 (Justice Laws Website), retrieved October 2026
Disclaimer
Estimates only, not financial, legal or tax advice, and not a quote or an approval. Confirm every rate, fee and term with your lender and your agreement.