Expanding your business, remodelling the office, or launching a start-up company, you will have to make a decision on how you will purchase your office furniture. Before you go to the bank, or dip into your cash flow, consider leasing your office furniture as an option to buying.
Benefits of Leasing your Office Furniture
- Cash Flow – Use your available cash to invest in revenue generating opportunities, not assets that will depreciate over time.
- Opportunity to grow your business – Leasing offers the ability to expand your office space, buy the furniture you need, and get your team working on revenue generating projects.
- Tax Benefits – monthly lease payments can be deducted as an expense
- Increased Borrowing Power – Leasing increases your borrowing capacity as well as provides diversity in your financing. Leave your lines of credit available for other short term needs which cannot be financed.
Myths about Leasing
Furniture must be new
False – You are not limited to new furniture when considering leasing, but can include used or remanufactured furniture in a lease when designing your office space.
The only reason to lease is if you cannot afford to buy.
False – Leasing customers can be well established businesses. Leasing is a business decision offering: tax benefits, increase borrowing power, business development opportunities, and cash flow.
Leasing is always more expensive than bank financing
False – Leasing offers a fixed rate for the term of your lease, no annual fees, no on-going reporting, and typically no security against other assets in your business. There may be other reasons to borrow from your bank, but it is not always because it is less expensive. Research all your options.
Leasing has too many restrictions and paperwork
False – Leasing terms are flexible, ranging from 24-66 months, and offer a variety of end- of-term options. Invoicing and payment options are often offered to support your administrative needs.
I give back my furniture at the end of my lease
False – Furniture leasing is often a ‘lease-to-own’ program. Unlike a typical car lease, where you give back your car after so many months or kilometers, the furniture is yours at the end of the term. Lease renewal or trade-ups are a couple of options that leasing companies offer.
Leasing is only for large companies
False – Leasing is available for various sizes of purchases: from a couple thousand, to multimillion dollar deals, organizations of all sizes can consider leasing their office furniture as an option.
So, there you have it! You know a few benefits of leasing, and a few myths have been cleared up. The next step is to find out what works best for your business. Will you purchase your office furniture, or will you lease it? If you do decide that leasing is the right option, make sure to interview a few leasing companies to see what they have to offer. A good leasing company will not only be able to customize the rate and term package for your business, but they will offer the help and support you need along the way.