Buying office equipment can be a huge expense for a new company. Renting is one other long-term option, but leasing offers several benefits as well. Here are a few of the advantages of choosing to lease your office space equipment:
- Leasing can help your business afford more. You might not be able to afford to buy top of the line office equipment for your office space, but you might be able to afford to lease it. Having better furniture and office equipment in your space can boost your employees’ morale and productivity and can create a more professional image for your company.
- Leasing could be beneficial for your balance sheet. You might be able to leave some leased assets and related obligations off of your balance sheet. This could potentially improve financial indicators such as your company’s earnings-to-fixed-assets ratio or debt-to-equity ratio. However, remember that accounting rules do require that under certain types of leases you have to report assets leased on your balance sheet.
If you choose to lease rather than purchase equipment, keep your lease short-term—two years is a good length. Negotiating a “modern equipment substitution clause” will let you exchange or update your office equipment so that you can keep up with the changing technology. You will also want to include a cancellation clause that allows you to cancel the lease for a fee, and be sure to note the cost of a cancellation penalty.