Equipment Finance Calculator

Equipment finance repayments use the standard principal and interest amortisation formula, with one twist: most equipment loans carry a balloon (also called a residual) payable as a lump sum at the end of the term. The balloon is excluded from the amortising balance and discounted back to today, which lowers the monthly repayment but leaves a final payment to refinance, pay out, or settle by selling the asset. Your repayment therefore depends on four inputs: the amount financed (purchase price less any deposit or trade-in), the interest rate, the term, and the balloon percentage.

A balloon (chattel mortgage and hire purchase) or residual (lease) is a lump sum owed at the end of the finance term. Setting a balloon of 20% to 30% can cut the monthly repayment noticeably, but you pay more total interest because the balance stays higher for longer. At the end of the term you either pay the balloon out, refinance it over a further term, or sell or trade the equipment and use the proceeds. For leases, the ATO publishes minimum residual values that vary by term, so a lease residual is not entirely a free choice.

On a chattel mortgage, a GST-registered business that accounts on an accruals basis can generally claim the full GST input credit on the purchase price in the BAS for the period in which the equipment is acquired, even though the loan is repaid over several years. That is the single biggest cash-flow advantage of a chattel mortgage over an operating lease, where GST is instead claimed progressively on each rental payment. Businesses on a cash basis claim the credit in line with payments. This is general information, not tax advice: confirm your position with your accountant.

Equipment and machinery finance rates in Australia typically sit between 5.49% and 12% p.a. depending on the asset, its age, the term, and your business profile. New, readily resaleable assets from an established business (prime movers, excavators, tractors) attract the sharpest rates near the bottom of that range. Older used equipment, specialised or low-resale assets (fitouts, IT, medical), and newer ABNs sit higher. Private-sale purchases usually cost more than dealer purchases. Use the mid-range as a starting estimate, then get a broker to quote your actual asset.

Yes. A deposit or trade-in reduces the amount financed, so it lowers both the monthly repayment and the total interest paid. Many lenders offer 100% finance on equipment with no deposit at all, which preserves working capital but costs more over the term. A deposit can also improve the rate offered, particularly on used equipment or for businesses with a shorter trading history.

It gives a close estimate of the repayment on the numbers you enter, but it excludes establishment fees, monthly account fees, broker fees, and any insurance premiums you choose to finance. Those typically add a small amount to the real repayment. Actual rates depend on the lender, the asset, and your credit and business profile, so treat the output as an indicative figure for comparison and budgeting rather than a quote.