That’s a very interesting question. In order to answer it, I would suggest looking at the overall expenses a new business has to factor in. For example, when first starting off as a new business, a new law firm would have to rent office space. This usually involves the monthly...
That’s a very interesting question. In order to answer it, I would suggest looking at the overall expenses a new business has to factor in. For example, when first starting off as a new business, a new law firm would have to rent office space. This usually involves the monthly rent, and a deposit which has to be paid on top of the first month’s rent. Furthermore, the new law office will need to be paying for other items such as insurance, decorating costs, equipment, and furniture. In addition to this, all employees will need to receive their salary after the first month of working for this new law office. However, the problem is that at this point the business may not have made a lot of money. It might initially be quite difficult to attract clients, and any existing clients might not pay invoices in time.
I hope this explanation makes it clear that this is the main reason why it is a good idea for a new law firm to lease furniture, rather than to buy it: it will allow the owner(s) of this law office to spread the cost of furniture across several months. This avoids a large expense right at the start of running a new business, when, as explained above, there are already so many other financial factors to take into account. As leasing is not a loan, it will not affect the credit rating of the new law office, either. As the lease is usually payed weekly or monthly, calculating expenses for the new office will be much more predictable. In addition to that, it will be possible to deduct furniture payments from future tax payments.
Secondly, you might want to consider that leasing furniture allows the law office to choose furniture of a better quality which they might have otherwise been unable to afford. This will enable the office to perhaps look smarter and more professional to potential clients right from the start.
Furthermore, when the lease runs out, the law office could even consider to replace the old furniture with brand new furniture. They could simply take out a new lease with the same company, in which case they wouldn’t have to pay for the removal cost of the old furniture.