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Financial Calculators

Should I lease or own my business location?

Square footage desired
Zip code of property location
Annual revenue
Years in business

If you buy:
Property purchase price
Portion of property purchase price that is for land
Closing costs
Down payment
Loan term in months
Interest rate
MACRS depreciation years

If you will lease:
Security deposit
Is the security deposit refundable at the end of the lease term?
Frequency of lease payments
Annual CAM expenses
Lease term in months
Annual increase in lease payments

Predicted property value activity:
How might property values change?
By how much might property values change annually?

Other costs:
Construction or remodeling costs
Annual property insurance
Annual property tax*

Projected monthly expenses:*
Natural gas
Waste disposal

Tax, savings and inflation rates:
Federal tax rate
State tax rate
Savings rate
Inflation rate

*Enter only the amounts that you expect to pay. If the expense category is covered by your lease agreement, put $0 in the respective box under the lease column.

Years in business: In the first several years of starting a new business, you may not have enough retained earnings to pay for growth of your business. We use five years as a reasonable period to define the early stage of a business where there is a tendency to rely more on borrowing or selling equity vs. retained earnings.
Loan payoff: A payment that you make on a loan or other debt to remove the entire amount owed.
Line of credit: A form of revolving credit whereby the borrower can draw down only the amount needed, up to the amount of the credit limit. The borrower only pays interest on the amount drawn, or disbursed.
Discount rate: The discount rate is the interest rate the Federal Reserve, the U.S. central bank, charges banks on loans the Fed makes at its discount window. Banks seldom borrow at the discount window, since the Fed is considered a lender of last resort. The discount rate is important, however, in that it is routinely used as an index rate by the lenders to set interest rates on a range of consumer loans. This includes auto, credit card, and home equity loans. Generally, the Fed lowers the discount rate when it changes its target for the fed funds rate.
Closing costs: The total expenses that the buyer pays at the time a real estate transaction is completed, e.g. application fees, underwriting and loan-origination fees, etc.
Other lease costs: Periodic expenses that are not a part of the monthly lease rental rate such as security, maintenance, advertising, insurance premiums, and taxes.
Maintenance expenses: The costs incurred to keep equipment or property in good condition and/or good working order.
Tax-deductible: An item or expense subtracted from adjusted gross income to reduce the amount of income subject to tax.
Down payment: The cash you deposit towards the purchase of home, car, etc. The larger the down payment, the less you are required to borrow.
Base rent: The basic lease rent you pay per square foot of leased space.
MACRS: MACRS (Modified Accelerated Cost Recovery System) is the depreciation schedule that businesses use to depreciate business equipment, buildings, and other real estate improvements over the useful life of the assets.
Mid-month convention: A depreciation convention that assumes the depreciable asset is put in place in the middle of a given month. As a result, depreciation expense in the first month is one-half the normal monthly depreciation expense.
Annual CAM expenses: Periodic expenses that are not a part of the monthly lease rental rate and are paid by the tenant (lessee) to the owner (lessor) for overhead expenses such as security, maintenance, and advertising.
Tax savings: The amount you may save in taxes from a tax deduction or tax credit.
Principal: Also called the loan balance, principal is the original amount owed on a loan
Lease: A contract between two parties, a lessor and lessee, whereby the lessee makes periodic payments to the lessor to rent an asset.
Depreciation: The decline in an asset's value over the course of its useful life due to wear and tear and obsolescence.
Present value: The value of a future payment, or series of payments, discounted at the appropriate interest rate to determine the value in today's dollars.
Term loan: A loan whose principal is repaid, or amortized, over a fixed term.
Land purchase price: The portion of the purchase price used to pay for the land that sits under the asset.
Straight-line depreciation: A method of depreciation whereby the difference between an asset's cost and its expected salvage value is divided by the number of years it is expected to be used.
Lease term: The period that the lessee contracts with the lessor to make lease payments. At the end of a lease term, the lessee may have the option to renew the lease for a new term, purchase the equipment at a price called the residual value or walk away from any further obligation.
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Calculators are provided by LeadFusion, Inc., a third party that is not affiliated with M&T Bank. M&T does not endorse or guarantee the accuracy or results provided by the calculators or any accompanying information and M&T has no responsibility or liability whatsoever in connection with the use of the calculators or any related material. The information provided by/with the calculators is for illustrative purposes only and may vary from your actual loan, mortgage, investment, or savings results. Interest rates are hypothetical and are not meant to represent any specific investment. Rates of return will vary over time, particularly for long-term investments. Reliance on any information provided by/with the calculators is solely at your own risk.