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Independent machine intelligence · Research before the decision
THE MACHINEBLUE BOOKResearch · Market · Ownership
MBB Explains · Film 03

What Hypothetical 2% Financing Really Costs

Two percent. Time for champagne?

Open the machine financing resourcesMore MBB Explains films
MBB Explains · 59.5 secondsOriginal MBB animation · English captions

About this film

Two percent. Time for champagne?

Not quite. Bronto examines a hypothetical low-rate deal, the complete cost and the cash Bob would keep. The fine print has declined to celebrate.

Example assumptions

Hypothetical fixed nominal annual interest 2%, $100,000 principal, 60 equal end-of-month payments, full amortization, no fees or balloon. The rate is not an actual offer, availability claim, current or normal rate.

Educational boundary

General educational information only, not an offer of financing, a recommendation to borrow, or individual financial, tax, legal, engineering or safety advice. All dollar amounts are USD. Bob, the finance representative and their situations are fictional. Numerical examples are hypothetical, not current offers, market benchmarks, normal rates, quotes or promises of approval or return. Eligibility, terms, fees, tax treatment, ownership rights and laws depend on the actual agreement, jurisdiction and circumstances. MBB is an independent information resource, not a law firm, and is not acting as your lender, broker, attorney, accountant, financial adviser or site engineer. Consult appropriately qualified professionals and read the actual written terms before deciding. Commercial equipment credit does not automatically receive consumer mortgage protections.

An MBB Explains short, narrated by Bronto. Fictional illustrations turn machinery questions into something a little easier to understand.

Independent machinery knowledge. Understand the numbers before deciding.

Original MBB animation with synthetic Bronto narration. Narration: synthetic Bronto voice. The film uses English captions as a separate track, so they can be turned off.

Read the complete transcript

Imagine Bob has a two percent offer. Entirely hypothetical, but he is preparing a victory speech. Let us inspect the terms before the champagne becomes a business expense. A hundred thousand dollars at two percent annually, repaid over sixty months with no fees or balloon, costs roughly seventeen hundred and fifty three monthly. Total interest: about five thousand one hundred and sixty seven. That cost may be worthwhile if keeping cash protects payroll, funds profitable work or provides a sensible reserve. Cheap borrowing can buy useful flexibility. But compare the cash price, fees and total payments. A low rate attached to a higher purchase price may be a discount wearing a false moustache. Two percent is a price, not permission to stop thinking. Explore financing questions at Machine Blue Book. General education, not individual advice.