Equipment Loan Calculator
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10%
Down payment: $0
%
Typical bank equipment loan: 7–11%
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New revenue this equipment will generate per year — enables break-even + payback calculation
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Total cost of financing
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5-Year Payback Ratio
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Build your full Loan Package →Equipment Financing — Answered
Common questions from trade business owners before financing equipment.
What interest rate should I use for HVAC or plumbing equipment?
Equipment loans for trade businesses typically run 6%–12%. SBA 504 fixed rates: ~6%–7% for major equipment over $150K. Bank equipment loans: 7%–10%. Equipment financing companies: 9%–14%. The 9.5% default reflects a mid-market bank rate for a trade business with good credit. Get 3 quotes before committing — rates vary significantly by lender and credit profile.
What loan term is typical for trade business equipment?
3 years for smaller tools and diagnostic equipment. 5–7 years for trucks, lifts, and specialty machinery. Match the term to the useful life — a 3-year note on a 10-year asset builds equity faster and reduces total interest paid. SBA 504 for major equipment can extend to 10 years at a fixed rate.
How do I calculate break-even on equipment financing?
Break-even months = Monthly Payment ÷ Monthly Revenue Lift. If your monthly payment is $1,800 and the equipment generates $2,400/month in new revenue, break-even is 1,800 ÷ 2,400 = 0.75 months — under one month. For most trade equipment, under 24 months is strong. Over 36 months warrants a closer look at your revenue assumptions.
What is the payback ratio for trade equipment?
Payback ratio = 5-year revenue lift ÷ equipment cost. Above 2× is strong (equipment generates 2× its cost in 5 years). 1–2× is positive ROI. Below 1× means the equipment won't pay for itself in 5 years — can still be justified for capacity or compliance, but needs a stronger narrative for lenders.
Can I use an SBA loan for trade business equipment?
Yes. SBA 7(a) (up to $5M, up to 10-year terms) and SBA 504 (fixed rate, ideal for equipment $150K+, up to 10 years) are both available. SBA 504 is often 1%–2% cheaper than 7(a) for major equipment — the tradeoff is a longer process and a Certified Development Company. For equipment under $150K, conventional bank equipment loans or SBA 7(a) Express are faster.