As biotech startups grow, so do the financial decisions behind the bench. One of the most consequential? Whether to lease or buy lab equipment.
It might seem tactical, but it’s deeply strategic—especially as you raise capital, scale operations, and optimize for long-term value. The right decision can preserve cash, reduce risk, and unlock operational flexibility. The wrong one can tie up capital or stall progress when timing is everything.
There’s no universal answer. It depends on your company’s stage, financial goals, and scientific timelines.
This post breaks it down: when leasing makes the most sense, when buying is the smarter move, and how to evaluate the total cost of ownership—so you can make the right call for your science and your balance sheet.
When leasing makes more sense
Leasing isn’t just for companies that can’t afford to buy—it’s often the smarter choice for startups that need to move fast, stay lean, and remain flexible.
Here’s when leasing gives you a strategic edge:
1. You’re early-stage and cash is king
Cash conservation is critical in the pre-seed to Series A stretch. Leasing eliminates large upfront costs and smooths expenses into predictable monthly payments. That keeps more capital available for hiring, R&D, and hitting scientific milestones.
2. You’re scaling quickly
Leasing allows you to expand your lab infrastructure without delays. Need a second centrifuge next month? A -80°C freezer next quarter? Leasing lets you adapt without major capital outlays—ideal for milestone-driven growth.
3. You want access to the latest tech
In fields like genomics, imaging, or high-throughput screening, equipment can become outdated fast. Leasing helps you avoid being locked into tools that might not keep pace with your science—or the competition.
4. You’re navigating uncertain timelines
If you're not sure how long you’ll be in your current lab, or what your needs will look like post-Series B, leasing buys you flexibility. It also reduces obsolescence risk, especially for high-tech or specialized equipment.
5. You want bundled service and maintenance
Leasing agreements often include service contracts, calibration, and warranties—simplifying operations and saving costs when something breaks. For lean teams, that peace of mind is valuable.
In short: Leasing is ideal when capital efficiency, flexibility, and speed matter more than full ownership.
When buying is the better bet
Leasing offers flexibility—but sometimes owning outright is the smarter long-term move. Here’s when buying makes the most sense:
1. You’ll use it long-term
If a piece of equipment is core to your workflow—and you’ll use it for years—buying may offer a better return over time. High-use items like pipettes, water baths, or benchtop centrifuges are often cheaper to own outright than lease.
2. You’ve secured stable infrastructure
Once you’ve locked in your lab space and aren’t anticipating a move or major pivot, it can make sense to invest in the equipment that supports your core operations long-term.
3. You want to capture depreciation benefits
Purchased equipment can be depreciated over time, creating potential tax advantages (depending on your corporate structure and revenue). This is particularly useful in later stages or post-IPO, when you’re optimizing your balance sheet.
4. You’re planning for full asset control
Owning gives you full control over resale, upgrades, or relocation. There’s no lease-end negotiation, and no obligation to return or renew. For some CFOs and lab managers, that control outweighs the flexibility leasing offers.
5. You’re flush with cash
Whether from a large funding round or ongoing revenue, having enough capital on hand can shift the equation. If a major equipment purchase won’t strain cash flow—or if buying gives you negotiating power with vendors—it may be the better route.
The key here? Buying works best when stability, long-term use, and tax optimization outweigh the benefits of flexibility.
How to weigh total cost of ownership
Leasing vs. buying isn’t just a monthly payment comparison. It’s a strategic decision that involves evaluating the true, long-term cost of owning and operating your equipment.
Here’s what to factor in:
1. Upfront costs vs. ongoing payments
- Buying: Larger upfront cost, no recurring payments (aside from service/maintenance).
- Leasing: Lower upfront cost, predictable monthly payments—freeing up cash for operations.
Ask yourself: Will that upfront investment slow down hiring, R&D, or fundraising?
2. Maintenance, service, and downtime
- Bought equipment: You’re responsible for maintenance, calibration, and repair costs.
- Leased equipment: These services are often bundled, reducing unexpected expenses and downtime.
Ask yourself: Can your team absorb the time and cost of managing service contracts internally?
3. Tax implications
- Buying: Equipment is typically capitalized and depreciated over its useful life.
- Leasing: Payments are often tax-deductible as operating expenses—a potential short-term benefit, especially for early-stage companies.
Talk to your CFO or tax advisor—the impact on your financials can vary depending on your stage and structure.
4. Obsolescence risk
- Buying: You own the risk if equipment becomes outdated or incompatible.
- Leasing: You can upgrade or switch out tools more easily as technology evolves.
Ask yourself: Is this technology advancing rapidly? Could you be stuck with an outdated system in two years?
5. Balance sheet impact
- Buying: Increases capital assets; may impact certain financial ratios or debt covenants.
- Leasing (operating lease): May keep liabilities off the balance sheet—or at least lower them—depending on structure and accounting standards.
Bottom line: The lowest sticker price isn’t always the best value. Run the full numbers—and make sure your finance team is part of the conversation early.
Decision matrix by company stage
Your lab’s financing strategy should evolve as your company does. Here’s how the lease-vs-buy equation typically changes across funding stages:
Pre-seed / Seed
Leasing is king.
Cash is limited, and milestones are short-term. Leasing allows you to defer big capital outlays while still getting access to essential tools. Focus on flexibility and cash flow.
- Key priorities:
- Conserve cash
- Short timelines
- Maximize runway
Series A
Leasing still makes sense—but with more selectivity.
You have more funding, but also more burn. Use leasing to stay nimble while scaling, but consider buying inexpensive, frequently used tools if it’s more cost-effective long-term.
- Key priorities:
- Expand capabilities
- Avoid overbuying
- Support team growth
Series B+
Hybrid strategies become common.
At this stage, companies often own their core infrastructure (e.g., basic benchtop tools) and lease high-cost, specialized, or fast-evolving systems. Think strategically about depreciation, tax benefits, and asset control.
- Key priorities:
- Optimize financial structure
- Minimize obsolescence
- Support scale and specialization
Post-IPO or revenue-stage
Owning becomes more attractive.
With stable revenue and long-term forecasting, full ownership can support tax optimization and balance sheet strength. That said, many still lease niche or high-tech gear to maintain agility.
- Key priorities:
- Tax strategy
- Long-term asset planning
- Infrastructure stability
There’s no single “right” path—but there is a right strategy for where you are right now.
Final thoughts
There’s no one-size-fits-all answer when it comes to lab equipment financing. What matters is making informed, stage-appropriate decisions that align with your science, your financial goals, and your growth plans.
Leasing can unlock flexibility and preserve cash. Buying can offer long-term value and control. The best strategy? Often, it’s a mix.
Want help deciding what makes sense for your lab setup? can help you run the numbers—and build a plan that fits your runway, your roadmap, and your science. Learn more about our leasing program.