Equipment lease calculator
Estimate monthly rentals on a business equipment lease. Choose how many rentals are paid up front (e.g. 3 + 45) and whether the lender takes a residual value.
Estimated monthly rental (ex VAT)
£1,810.82
- VAT per rental (20%)
- £362.16
- Paid at the start (3 rentals, ex VAT)
- £5,432
- Total rentals (ex VAT)
- £86,919
Profile: 3 + 45. With a lease the lender owns the equipment; VAT is charged on each rental rather than up front.
Check eligibility for this amountIllustrative only. Actual rates, fees and terms depend on your circumstances and the lender. This is not an offer of finance.
How this calculator works
With a lease, the lender owns the equipment and your company pays rentals to use it. Rentals are usually paid in advance, often with several up front (a “3 + 45” profile means three at the start, then 45 monthly).
VAT is charged on each rental rather than on the full price up front, which can help cash flow. With an operating lease the lender takes a residual value, which lowers the rentals.
Rentals are usually a business expense for tax, and most leases now appear on the balance sheet. Ask your accountant how this applies to your company.
The main figure is the rental before VAT, with VAT shown on its own line. The calculator assumes rentals are paid monthly in advance, with the number you choose collected at the start. Paying more rentals up front lowers each rental slightly, but needs more cash on day one. Total rentals show what you pay over the term, before VAT and before any end-of-lease costs.
Try adding a residual value to see how an operating lease can lower rentals. For illustration only: £75,000 of equipment over 48 months at an example 9% a year, with 3 rentals up front, costs about £1,826 a month with no residual and about £1,698 with a 10% residual. The lender carries the risk of that residual, so it usually only applies to assets with a dependable resale value.
When comparing lease quotes, look beyond the rental: documentation fees, the cost of secondary rentals if you keep the asset, return conditions, maintenance obligations and insurance. Some agreements cannot be ended early without paying most of the remaining rentals. Lenders usually assess both the company’s accounts and the type of equipment.
Equipment lease calculator: common questions
Leasing or hire purchase: which is cheaper?
It depends on the asset, how long you’ll keep it, your tax position and VAT. Leasing can mean lower upfront cost; hire purchase leads to ownership and capital allowances. Compare both with our asset finance calculator.
What happens at the end of the lease?
Typically you can return the equipment, extend the lease on a secondary rental, or (on some finance leases) sell it and share the proceeds as agreed. You don’t usually become the owner.
What can be leased?
Most business equipment: machinery, IT, catering, medical, construction plant and commercial vehicles. Lenders prefer assets with a clear resale value.
Can I lease used equipment?
Some lenders will, often depending on the equipment’s age, condition and resale market. They may shorten the term so it ends well within the asset’s working life, ask for an independent valuation, or set a lower residual value. Specialist or heavily customised used equipment can be harder to lease than widely traded items.
What does 3 + 45 mean on a lease?
It describes the rental profile: three rentals paid at the start, followed by 45 monthly rentals, making 48 in total. Other common profiles have one, six or a different number of rentals up front. More up front lowers each later rental slightly but needs more cash at the start.
Can I end an equipment lease early?
Often only by paying a settlement amount, which may cover most or all of the remaining rentals, sometimes with a discount. Some leases allow an upgrade to newer equipment partway through. Check the termination terms before signing, especially for technology that may be replaced sooner than the lease term.
Do I need to insure leased equipment?
Usually, yes. Most lease agreements require the company to insure the equipment for its full value and keep it maintained, even though the lender owns it. Some lenders note their interest on the policy. The cost of insurance and maintenance is not included in the calculator, so add it when budgeting.
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Get real figures for your company
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