Driftwater Loans, a small-business funding service in Fort Myers, Florida, provides an equipment loan calculator for a base payment and explains how a balloon at the end changes the monthly payment and the total cost, with a worked example.
Equipment Loan Calculator with Balloon for Lee County, FL Businesses
- Equipment price: the agreed price plus tax, delivery and attachments you are financing.
- Down payment: cash paid up front.
- Interest rate: the annual rate stated in a real offer.
- Term: the number of monthly payments.
The calculator returns the payment with no balloon. To see a balloon's effect, use the method below or the worked example; the partner's offer sets the real figures.
Business Loan Balloon Payment Calculator
A balloon is a larger final payment that leaves part of the balance unpaid until the end. Monthly payments are lower because they do not repay that part during the term; interest is still charged on it every month. At the end you pay the balloon in cash, refinance it, or, under some agreements, return or sell the equipment.
Equipment Finance Calculator with Balloon Around Fort Myers, FL
Illustration only, invented figures: a $90,000 machine with $9,000 down leaves $81,000 financed over 48 months at 9% a year.
| No balloon | With a $18,000 balloon | |
|---|---|---|
| Monthly payment | $2,016 | $1,703 |
| 48 payments total | $96,753 | $81,732 |
| Balloon at the end | $0 | $18,000 |
| Total paid after the down payment | $96,753 | $99,732 |
In this invented example the balloon lowers the payment by about $313 a month but raises the total paid by about $2,979, because interest runs on the balloon amount for the whole term.
Equipment Finance Calculator with Balloon Excel: How It Works in Fort Myers, FL
A spreadsheet's payment function takes the rate per month, the number of payments, the amount financed and a future value. The balloon goes in as the future value, entered as a negative number, so the function returns the payment that leaves exactly the balloon at the end. Using the calculator on this page instead: work out the present value of the balloon, subtract it from the amount financed, and enter the result as the price with no down payment.
In the invented example, the $18,000 balloon is worth about $12,575 today at the offer's rate, so entering $68,425 as the price returns the same $1,703 payment.
Equipment Loan Calculator: What Lee County, FL Owners Compare
- Monthly payment with and without a balloon.
- Total paid, including the balloon.
- What the equipment is likely to be worth when the balloon falls due.
- Whether the agreement lets you refinance the balloon, and on what terms.
A balloon suits equipment that holds its value, so a sale at the end can cover it. The equipment financing page covers the types of equipment partners finance, and the guides page lists the other tools.
Balloon, Residual and Buyout: Three Words for the End of a Term
A balloon is a final loan payment you owe. A residual is the value a lessor expects the equipment to keep, which sets a lease payment. A buyout is the price, stated in a lease, at which you can buy the equipment at the end. They shape the monthly figure in similar ways but leave you in different positions: owing money, returning the machine, or choosing whether to buy it. Read which one an offer contains.
When a Balloon Fits and When It Does Not
A balloon can help when cash is tight in the early months of a new machine's work, or when you plan to replace the machine before the term ends. It is a poor fit when the equipment loses value fast, because the balloon may then exceed what the machine is worth. Ask the partner what happens if the balloon cannot be paid on the due date.
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