A corporate lease is very much like a residential home mortgage, but it applies to just about any major asset that a business may need. Once a need is identified, a business may then approach a corporate leasing company about the desired equipment or real estate. The leasing company purchases the item or property, and then sets up a leasing agreement with the business, which will then have unlimited use of the property for a pre-determined amount of time. During this time, the business will pay the corporate lease in established increments.

Corporate Lease Advantages

The underlying principle to the corporate lease program is that profit is no longer tied up in the ownership of property, since the inherent value is actually in the property’s use. The use of the property doesn’t tie up capital or credit lines, so a small business may still use these for other business needs. In addition, leases are generally tax deductible.

Some corporate lease programs actually allow an item recently purchased by a business to be bought by the leasing agent, and then leased back to the small business. This frees up any capital that was spent in purchasing the item, while still allowing the use of the equipment.

Corporate leases do have their drawbacks, however, since most corporate property leases will never transition into ownership for a small business. To get the most out of a lease agreement, it may be prudent to hire a small business broker like , which has experience in lease negotiation.