Short-term rentals typically last anywhere from a few days to a few weeks to several months. They rarely go beyond a year. Short-term rental agreements over an extended period of time are not very cost-effective.
In contrast, long-term rentals last much longer—anywhere from one to five years (or longer), and are generally more affordable to finance because of the way costs are spread out. You’ll often hear long-term rentals referred to as leases when the lease is classified as an operating lease rather than a capital lease, or finance lease.
Excedr is an example of a leasing company that provides long-term rentals, or leases. Our operating leases are considered long-term rentals because of our lease agreement terms.
In this article, we’ll review short-term and long-term rentals, the pros and cons of each, and some alternative options you have to purchasing or leasing.
A rental refers to something that is rented, and renting is an agreement by which a payment is made for temporary use of an asset, whether it be property, equipment, or something else.
A lease, similarly, is a contract outlining the terms under which one party agrees to rent an asset—in our case, a piece of, or several pieces of, laboratory equipment—owned by another party.
It guarantees the lessee use of the lab equipment and guarantees the lessor (the equipment owner) regular payments for a specified period in exchange. You can think of a lease as a contract for renting an asset.
So, already there is similar language being used in both cases. In either situation, there is someone paying for the use of an asset and someone receiving payments for the usage. Short-term rental and long-term rental, or lease, contracts also share some things in common:
But, despite these similarities, there are a few major differences between renting short-term vs. long-term. The main distinction is the duration of time the scientific instrument is used for.
There are also general and specific differences in the structure and flexibility of each contract, meaning the terms you’ll see in a long-term rental (or lease) vs. a short-term rental agreement can, and usually wil, be different.
These differences can make it more or less optimal for you, depending on your equipment needs, so it’s important to understand exactly what instrumentation you need and how long you’ll need it for.
At Excedr, we often refer to our leases as long-term rentals, because, well, they are! Although we do not provide short-term rentals, we do provide long-term rentals, in the form of a lease. So, if you want to rent lab equipment, this might be the place.
If you’re thinking of renting lab equipment, whether it’s an analyzer, spectrometer, incubator, or centrifuge, it’s important to know how long you’ll need to use the instrumentation. This can help you decide whether you need a short-term rental or a long-term rental.
If you only need the equipment for a short period of time—anywhere from 30 days to a year—you’ll want to consider renting or using a core facility or contract research organization (CRO). But, if you’ll need the equipment longer—say a year to three or four—then leasing will be a better fit for you.
Renting suits short-term projects best; ones that need the machinery for less than a year. A lab manager should consider renting only occasionally, generally doing so on an ad-hoc basis, such as when a bioreactor, centrifuge, freezer, or gas chamber is required for a short amount of time. There are rental contracts available for low-end equipment as well.
However, lab equipment rentals are often more expensive in terms of price for the amount of time the equipment is in your laboratory, so they are not the best option for a long-term solution. In these cases, leasing or buying your lab equipment can be better options.
It can be smarter to rent equipment for temporary usage—several days or a few weeks—then to buy or lease. In fact, leasing companies won’t lease anything for less than one year. Or, in some cases, less than two years.
That said, if you need customizable or specialized lab equipment for lengthy basic, translational, or clinical research, then renting long-term will be the better option. You’ll be able to secure better rental terms, experience greater flexibility, protect your equipment with comprehensive repair coverage, and even buy the equipment at the end of your agreement.
That said, if you have the cash, purchasing a piece of equipment outright with cash is the typically the simplest way to proceed. However, it can possibly lead to cash flow problems down the road.
Leasing options, whether they’re short-term or long-term, can be a great alternative to procuring the necessary equipment for your business. The length of the rental or lease simply depends on how long you need the instrument.
The most important factor to consider when deciding between your lab instrument rental options is the duration of time you’ll need the equipment for. However, there are other factors to consider. Let’s review some of the pros and cons of short-term rentals.
Short-term rentals can be helpful if you need the equipment for a short period of time. However, you’ll have to accept working with equipment that may not meet the exact specifications you require for your research and product development. Furthermore, the lack of flexibility of renting short-term will make using the equipment more of a burden than a benefit.
Long-term rentals are great if your clinical or research lab needs the equipment for a longer period of time, and if you want to take advantage of more flexible rental agreement terms and cost-effective lease payments.
For instance, our equipment lease program helps you preserve your operating budget over time, rather than spend it one place, so that you can have the equipment you need in your lab while still having cash available to spend on other ongoing expenses like staffing and consumables.
You can expand your lab operations while still gaining access to the equipment you need. This plays well into your long-term goals. Plus, we cover the cost of all maintenance and repairs, so you don’t have to worry about managing annual service contracts.
In fact, many researchers decide to procure high-end lab equipment through a lease rather than buying. Renting high-end lab equipment is often very difficult to do as well.
Labs and organizations with small budgets, universities, research and development labs, and even chemical and agricultural companies rely heavily on leases, due to the flexibility leases like Excedr’s provide. Let’s review some of the pros and cons of long-term leases.
If you’re still unsure of what to do, consider this: despite there being some cons to long-term rentals, the pros far outweigh them. While leasing can end up costing you more, the money you save by avoiding the downpayment and spreading costs out over a long period of time can be put to significant company growth. It makes leasing an excellent financing option.
Further, lease terms are generally more preferable than loans, so even though you may save some money in the long run by taking out a loan and buying the equipment, your loan terms can end up affecting you worse than a lease would.
For example, in a loan, the interest is amortized throughout the term. In other words, you pay more interest at the beginning and more principal at the end. And while leasing, or long-term renting, isn’t free, the finance charges are fixed throughout the term and are not paid separately from the borrowed amount.
In addition to preferable terms, leases are suitable for equipment that loses value over time. It really only makes sense to buy a piece of equipment—either using a loan or your cash reserves—if it’s value will exceed the length of the lease term.
That all said, renting long-term, or leasing, is best if you need the equipment for a long period of time. Don’t sign a one year lease if you truly only need the equipment for one or two months. And don’t sign a short-term rental if you truly need the equipment for more than a year.
Here’s an example to leave you with:
It’s all about “operational needs.” If you needed a car for a year or more, it would be silly to rent short-term from Hertz for a year. Instead, you would just lease the car. However, if you needed the car for a weekend trip to Tahoe, then it would be silly to lease. In that situation, renting short-term is your best option.
Understanding your operational needs is the best way to figure out what procurement option is best for you and your laboratory.
Although we believe long-term rentals are almost always the best option, there are always times when you’ll only need access to equipment for a short period of time. However, you may have trouble finding a rental option.
That’s because short-term rentals of scientific laboratory equipment are uncommon due to the instruments being generally highly customized by the manufacturer for the end-user’s specific needs. Instead of renting the machine for the short term, you can consider the following alternatives:
These are centralized shared research resources that provide access to instruments, technologies, services, and expert consultations. Core facilities are usually located within universities and large research institutions and are a cost-effective option for short-term projects.
You can rent time on a shared machine or pay for other research services a la carte, but core facilities can be difficult to utilize consistently due to the volume of services they transact on a daily basis (e.g. all of the professors at the university, students, research scientists, outside companies, etc.)
Similar to core facilities, CROs allow you to contract services including usage of equipment, processing samples, clinical trial management, assay development, and more. You can rent time and services at these CROs in order to avoid having to purchase new or used equipment.
CROs have more time and resources to focus on you as their client, which means they are more readily available than a traditional core facility. However, they will be more expensive as a trade-off.
If you’re still deciding which specifications you need, consider asking the manufacturer to run a demo at your facility or at the manufacturer’s local demonstration facility. This option allows you to test whether the equipment you think you need is actually best suited for your research requirements.
If you know you’ll only need the equipment for a few days, weeks, or months, then a short-term rental, core facility, or CRO will make the most sense for your business. But, if you plan on using the equipment for an extended period—say, two to five years—long-term rentals are going to be your best solution.
Rather than work with a shady rental company or equipment dealer and spend an exorbitant amount of money on short-term rentals over a long period of time, take advantage of our leasing program’s founder-friendly terms.
We eliminate the upfront cost of purchasing new equipment by spreading its cost over time, minimize equipment downtime with included complete repair coverage and preventive maintenance, and allow you to take advantage of potentially 100% tax deductible* payments, providing you significant cash-savings.
Furthermore, you can expedite the administrative work needed for instrument procurement and logistics and conserves working capital, enabling you to reinvest in your core business and operations. Our Leasing program can provide flexibility and stability and give you peace of mind.
Whatever type of lab instrument or system you’re interested in—be it a mass spectrometer, PCR system, flow cytometer, HPLC system, low-temp freezers, or something else—our leasing program provides long-term rentals in the form of an operating lease.
Operating leases are an excellent type of equipment financing that can provide greater flexibility to small business owners and startup founders. You can replace or update their equipment more often, depending on the length of your lease. This reduces the risk of obsolescence you face when actually purchasing lab equipment.