Canyonhill Advances, a small-business funding service in Mankato, Minnesota, provides an equipment lease buyout calculator. Enter the buyout price, down payment, rate and term to estimate the monthly payment, total interest and total cost. The page explains fair market value and one-dollar leases, lease versus buy comparisons and how to read the result.
What the lease buyout calculator asks you to enter
- Price: the buyout amount in the lease, or the price the lessor quotes, plus any tax or fees you are financing.
- Down payment: cash you put toward the buyout; the rest is financed.
- Rate: the annual percentage quoted in a real partner offer. Use an offer rather than a guess.
- Term: the number of months for the financing.
The result is an estimate. The payment, fees and terms that count are the ones in a partner's offer.
Equipment lease buyout calculator: what Mankato, MN owners should know
At the end of many leases you can return the equipment, renew the lease or buy the equipment. Buying out means paying the buyout price, either in cash or by financing it. This calculator estimates the payment if you finance it, which lets you compare the buyout with renewing or returning.
Illustration only, invented figures: a buyout price of $18,500, financed in full at a rate of 9% a year over 36 months, comes to a payment of about $588 a month and about $21,179 in total (our arithmetic from the standard amortization formula).
FMV lease payment calculator in Mankato, MN
A fair market value (FMV) lease ends with an option to buy the equipment at its market value at that time. The buyout price is not fixed when you sign, so the decision comes at the end. Use the calculator with the lessor's quoted FMV price to see what financing it would cost, and compare that with the price of similar used equipment.
FMV lease calculator in Mankato, MN
For the lease payments themselves, the calculator can approximate an FMV lease if you enter the equipment price less the expected residual value as the amount financed, though a real lease may be priced differently. Treat this as a rough check, and ask the lessor for the exact payment and the total of payments.
This calculator does not compute a residual or a balloon directly. Do that part by hand, as described here.
Lease vs buy calculator equipment for Blue Earth County, MN businesses
To compare leasing with buying, total each option over the same period. For the lease: all payments plus the buyout if you plan to keep the equipment. For buying: the down payment plus all loan payments. Run the calculator for the loan option, and add up the lease payments by hand.
| Option | What to add up |
|---|---|
| FMV lease, then buy | Lease payments + FMV buyout (financed or cash) |
| $1 buyout lease | Lease payments + $1 |
| Equipment loan | Down payment + all loan payments |
Equipment buy vs lease calculator around Mankato, MN
Illustration only, invented figures: a lease has 6 payments of $1,150 left and an FMV buyout quoted at $21,000. Finishing the lease and paying cash for the buyout costs $27,900 (our arithmetic: 6 x $1,150 + $21,000). If similar used equipment sells for less than the quoted buyout, buying a replacement may cost less in total; if it sells for more, the buyout may be worth taking.
Reading the result before you call a partner
Run the calculator three times: with the rate from your offer, with a rate one point higher, and over a shorter term. The spread between the payments shows how sensitive the buyout is to terms. If the highest payment still fits your weakest month of deposits, the buyout is affordable on those terms.
- Check how many years of use the equipment has left.
- Compare the buyout with the cost of similar used equipment.
- Ask whether the lessor will negotiate the buyout price.
When a buyout makes sense
A buyout tends to make sense when the equipment has years of useful life left, when it is well maintained, and when the buyout price is at or below what similar equipment costs. It makes less sense for equipment that is near the end of its life or that you plan to replace with newer technology. Funding options for replacement equipment are on the equipment financing page.
Records to have ready for a buyout request
- The lease agreement and the end-of-term options page.
- The lessor's buyout quote in writing.
- The equipment's serial number, hours and condition.
- Recent bank statements and the tax return filed most recently.
Partners financing a buyout treat it like used equipment financing, so condition and remaining life matter.
Buyout, renewal or return: the three end-of-lease paths
Returning the equipment ends the cost but leaves you without it. Renewing keeps it at a new lease rate. Buying out converts it to owned equipment. Write the three totals side by side for the period you expect to use the equipment, and check the return conditions in the lease, because wear charges on return can change the comparison.
Other Canyonhill tools and the request form
Other Canyonhill guides, including the zoning and permits walkthrough, are on the resources page. To send a request, use the request form or call (507) 361-5031.
By Canyonhill Advances ยท Updated