Lease vs Loan Equipment Calculator

About this calculator

Businesses acquiring costly equipment — construction machinery, medical devices, manufacturing lines — typically choose between an operating lease (pay to use the equipment for a term, then return or buy it out at a residual value) and a loan (finance the purchase with a down payment, then own it outright once repaid). This calculator totals each path’s true cost: the loan side sums the down payment plus all loan payments, while the lease side sums the lease payments plus any end-of-term buyout, so you compare like with like.

Business owners and CFOs run this comparison because the cheaper option depends heavily on specifics that a simple monthly-payment comparison misses — a lease’s lower payments can be offset by a large buyout, while a loan’s higher payments build equity in an asset that has resale value when the term ends. This is standard practice in equipment procurement and capital budgeting, where the total-cost comparison (not just cash flow timing) drives the buy-versus-lease decision.