Buying vs. Leasing Office Furniture: A Guide

When you’re starting or growing a business, chances are your to-do list is longer than a game of Monopoly. While outfitting your office space with cubicles, desks, tables and chairs might not feel like you’re getting down to business, its kind of important (I mean, where else will your employees put their collection of baseball bobbleheads?)

It can also be one of the more costly portions of your to-do list. We’re guessing that if you’re in the startup stage or trying to grow your business, you’re not throwing around money like those banshee adolescents on “My Super Sweet Sixteen.” Running out to your closest office equipment retailer and buying brand-new furniture might not be an option.

Luckily, you have options – including saving money by buying used office furniture or leasing, rather than buying, the furniture and other office equipment you’ll need.

If you choose to lease, you won’t be alone. Eight out of 10 companies in the U.S. lease some or all of their office equipment, according to the Equipment Leasing and Financing Association.

There are plenty of reasons your company might decide to lease rather than buy equipment for its office. Maybe the business is a startup without enough capital to purchase everything outright, maybe it’s a business that won’t be around long-term, or maybe the business is month-to-month in terms of cash flow.

And hey, just because your circumstances are a little different than the office next door, doesn’t mean you shouldn’t be able to acquire a desk or two.

Here are several advantages to leasing, according to Advantage Leasing Corporation and

1. Credit. Instead of taking out a bank loan to purchase your equipment, use one to fill other business needs. Leasing frees up credit.

2. Better cash flow. Most of the time, leasing does not require a down payment, as opposed to taking out a loan, which might require a down payment up to 25 percent. By leasing, you make your equipment work for you. When leasing, you pay for equipment as it earns money for you, rather than before it earns money for you.

3. Tax deductible. In some cases, lease payments are a fully deductible expense.

4. Conserve working capital. By financing 100 percent of your equipment needs, you can free up working capital for other areas of need.

5. Easier financing. Bank loans for capital equipment often require that a business share two to three years worth of financial records, which is tough to produce if your company didn’t exist until recently. In contrast, leasing companies might only need to see six months to a year of records.

6. Make a better impression. If you’re a startup, you probably can’t afford to buy high-end, modern furniture, but you might be able to lease it. Impress both your employees and customers by showing your business is polished and forward-thinking.

7. Upgrades. Technology changes faster than Lady Gaga changes costumes. Short-term leases can be cheaper than replacing all of your pricey equipment every couple of years. Some leases have technology upgrades built into them.

6. Balance sheet benefits. Depending on the type of lease agreement you have, you might be able to exclude your leased equipment from your balance sheets, which could improve the financial indicators of your business.

Companies like Arnolds Office Furniture offer furniture credit helping businesses find low interest rates and competitive terms. If you’re considering leasing, check out this lease payment estimator.

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