Why Lease Office Funiture?
Leasing vs. loan for my office furniture needs
TOP BENEFITS OF OFFICE FURNITURE LEASING
- No down payment typically required.
- Lease payments can usually be fully deducted as a business expense.
- Easier to upgrade equipment as lessor takes risk of obsolescence.
- Can be considered off-balance sheet assets, with no associated liability.
- Conserves working capital and frees up existing bank lines of credit.
- Often requires less stringent credit criteria.
- Payments are fixed for the life of the lease, allowing easier budgeting.
- Generally requires no restrictive covenants or financial reporting.
WHAT OFFICE FURNITURE LOAN PROGRAMS LOOK LIKE
- Usually requires down payment of 20% or more of the purchase price.
- Typically won’t include soft costs such as shipping, training, and installation.
- Assets held as owned equipment without corresponding liability.
- Tax deduction for the interest and depreciation portion of the loan payment may be utilized, but this amount is less advantageous than expensing the entire payment amount.
- Borrower takes risk of equipment devaluation with technological obsolescence.
- Often requires additional collateral than just the equipment being purchased.
- Rates are often floating, subjecting the borrower to take risk that their payments could rise.
- Often requires borrower to maintain certain financial ratios and report financials monthly.