Lease vs. Buy: Investing in Office Business


Setting up a new business is expensive. You have to spend on premises, staff, licenses, etc. and most business owners have to struggle to make ends meet. Cash flow problems can become so bad that small businesses shut down due to the problem of low cash funding. In fact, more than 60 percent of all businesses shut down in the first three years due to cash flow problems. As a result, saving money and streamlining the business is one of the paramount concerns for business owners. One primary area where you can save money is on your office furniture. Vendors offer customers a choice between leasing and buying their furniture outright and both options do have their advantages. If you are in a similar quandary, here are a few things you should know about both options.

Leasing Office Furniture: Pros and Cons

Almost every furniture company offers lease options. With a lease option, you can choose the furniture you want and then sign a long-term contract with the company. This is good as the upfront costs are quite low and you just have to pay a small deposit and a monthly rental fee. You may have to pay maintenance and damage fees as well for the furniture you are using. You can also lease almost any kind of office furniture. For example, large stores like Vast Market offer office furniture like chairs, desks, tables, storage cabinets, AV equipment, boards and signs, carts, conference room furniture, outdoor furniture, science lab furniture, reception desks, etc. on a lease option. Along with furniture, you may also be able to lease computers and technical equipment to keep your systems up and running. The entire package deal may turn out to be quite affordable and you can return furniture or lease more furniture as your staff expands and contracts.Picture 012

However, leasing furniture is not without its problems. Some companies may only offer leases if you buy the furniture in the end. Other companies may offer only gently used or refurbished furniture for lease. In this case, you may not get exactly what you are looking for and you will have to make do with what the store is offering. Some companies may maintain the furniture themselves or you as the lessee will have to maintain the equipment until the lease expires. Lease payments are deductible but the total amount is not as much as buying furniture outright. Leases are also long term legal contracts. In case your business shuts down before the lease terminates, you may have to pay the company the pending payments to be free of the contract.

Buying Office Furniture: Pros and Cons

Buying your office furniture is a very good idea. As you are buying, you can choose the furniture you want and adapt it to your office. You own the furniture and you have to do maintenance on the furniture as well. However, now almost all vendors provide two to three year warranties that will protect your furniture and keep it in top shape. In case you have financial problems, you can easily sell the furniture back to the original vendor or auction the furniture for a good price. Office price is also in high demand and you will find vendors and websites offering competitive deals. In fact, the best time to shop is when websites clear out their old stock in sales. During this time, you will be able to pick up bargains at affordable rates. Of course, you can also check with wholesalers who offer office furniture packages that are perfect for specific businesses like restaurants, pubs, and coffee houses. Buying your own furniture also means that you get a substantial tax write-off (Section 179 of the IRS code) when you file your business returns says Nolo.


However, buying furniture is not without its problems. As you are buying furniture, the initial investment is quite large and it can be quite difficult for new businesses says Capital-Solutions. Technology in particular goes out of style quickly. Computer systems and hardware may get obsolete and you have to invest in these systems again by selling the old and buying new. This can turn out to be quite expensive in the end as well.

The Bottom Line

The decision to lease or buy depends on the condition of your business says Rbcadvicecentre. If you can afford to buy new furniture and are secure about your business future, you can choose to purchase outright. However, if you want to save money, then it’s a far better idea to lease furniture with a option-to-buy condition in the future. Make sure you also check the lease if you are leasing furniture as some companies will sell you the furniture at the end of the lease by building the cost into the rental payments. No matter which option you choose, take the time to sit down, assess the condition of your business, current cash flow, etc. before you actually proceed.