Launching a biotech startup is exciting—but expensive. Before the science can move forward, you need a lab, equipment, and a way to fund both without burning through precious cash. That’s where many founders hit a wall: the upfront costs of lab equipment can swallow a young company’s runway before the first experiment begins.

Leasing offers a smarter path. By spreading costs into predictable monthly payments, startups can preserve cash flow for R&D, hiring, and fundraising milestones—while staying flexible as needs evolve.

This guide explains how lab equipment leasing works, its benefits and tradeoffs, and when it makes the most sense for biotech startups.

Why Leasing Matters for Startups

The cost challenge of biotech labs

Even a modest lab build out comes with a hefty price tag. Outfitting space with essential lab equipment—centrifuges, incubators, freezers, biosafety cabinets—can easily run into the hundreds of thousands before a single experiment is underway. Add in real estate costs, procurement delays, and setup time, and the pressure on early-stage cash flow becomes clear.

For biotech startups, every upfront cost is magnified. Unlike more traditional tech ventures, life sciences companies need physical infrastructure from day one. That makes capital allocation a balancing act: spend too much on equipment, and you limit your ability to hire talent, run diagnostics, or invest in research and development.

Every dollar impacts milestones

Early-stage biotech companies live and die by milestones. Whether you’re generating proof-of-concept data, hitting preclinical benchmarks, or preparing for your first fundraising round, investors and partners want evidence that your science is progressing.

The problem is, those milestones often require specialized, cutting-edge tools. Without the right instrumentation in place, workflows stall, experiments get delayed, and the path to funding stretches longer than expected.

That’s why equipment decisions matter so much at the beginning. Every dollar you tie up in owned equipment is a dollar not available for building IP, paying operating expenses, or advancing toward your next round of venture capital. Leasing gives startups another way forward—one that preserves flexibility without sacrificing scientific momentum.

How Lab Equipment Leasing Works

Key players in leasing agreements

At its core, leasing is an agreement between two parties:

• The lessor (the leasing company or lender) that provides the equipment.
• The lessee (your company) that uses the equipment and makes payments.

Other players may also be involved. Providers and manufacturers supply the lab equipment itself, while incubators or landlords sometimes coordinate procurement for shared lab space. For startups, the key is understanding who owns the equipment, who services it, and what your obligations are as the lessee.

Common lease structures explained

Not all leases are created equal. Most biotech startups encounter two common types:

• Operating leases: Flexible, often shorter-term agreements where the leasing company retains ownership. At the end of the lease, you may return, renew, or sometimes purchase the equipment.
• Financing leases: Longer-term arrangements that function more like ownership, with the option to purchase the equipment outright after the lease term.

Lease terms can be structured to match the realities of research and development. In our 15 years of structuring leases for biotech startups, one consistent pattern we’ve seen is how important it is to align the lease term with key R&D milestones. For instance, a short-term diagnostic validation study may call for a very different structure than a multi-year pharmaceutical development program.

The flow of a leasing agreement

The process usually starts with identifying your equipment needs—whether that’s incubators, centrifuges, or cutting-edge instruments. Once approved, the leasing company procures the equipment and coordinates delivery. From there, your company pays a fixed monthly amount over the agreed lease term.

Leasing also changes how equipment shows up on your financials. Rather than taking a large depreciation expense for owned equipment, monthly lease payments are often treated as operating expenses, helping preserve working capital and improving visibility into cash flow.

At the end of the lease, you typically have options:

• Return the equipment if you no longer need it.
• Renew the lease to continue using it.
• Purchase the equipment if it’s still core to your workflow.

This flexibility makes leasing particularly useful for biotech startups whose equipment needs may shift quickly as programs advance, pivot, or scale.

Benefits of Equipment Leasing

Preserve financial health and flexibility

For early-stage biotech startups, every dollar matters. Equipment leasing helps preserve working capital by avoiding large upfront costs and converting them into predictable monthly payments. Instead of locking hundreds of thousands of dollars into owned equipment, you can spread costs over time, leaving more cash available for research and development, hiring, or fundraising activities.

This approach also simplifies cash flow management. Because lease payments are fixed, they show up as operating expenses on your balance sheet, making it easier to forecast burn rate and keep your financial health visible to investors.

Scale your lab as you grow

Leasing also makes it easier to scale intentionally. Rather than outfitting a full lab on day one, you can lease only the equipment you need for current milestones. As programs advance, workflows expand, or your lab space grows in square footage, additional instruments can be added without the pressure of reselling or storing unused equipment.

We’ve seen this pattern repeatedly over nearly 15 years of supporting biotech startups: the labs that scale step by step tend to be more resilient and efficient. By right-sizing your setup to current needs, you can streamline operations while staying flexible for future pivots.

Leasing also opens access to cutting-edge equipment that might otherwise be out of reach for early-stage teams. This means your workflows can stay competitive with larger biotech and pharmaceutical companies without the same upfront investment.

Additional advantages to consider

Beyond flexibility and cash preservation, leasing offers other benefits that can improve overall efficiency:

• Tax benefits: In many cases, lease payments are deductible as operating expenses.
• Less depreciation risk: You avoid the burden of owning assets that lose value quickly.
• High-quality support: Many leasing agreements include service and maintenance, ensuring equipment uptime and reducing operational risk.

Together, these benefits create room for biotech entrepreneurs to focus on building intellectual property, meeting milestones, and advancing science—without being weighed down by equipment ownership.

Key Considerations Before Leasing

Understanding the tradeoffs

Leasing isn’t a one-size-fits-all solution. In some cases, total lease payments can exceed the sticker price of purchasing equipment outright. But for most early-stage biotech startups, the tradeoff—preserving cash flow, avoiding depreciation risk, and staying flexible—far outweighs the difference in cost.

Another factor is timing. Lease terms need to match your research and development milestones. A two-year lease may be ideal for a diagnostic validation project, while a five-year lease might better suit a pharmaceutical development program. Aligning lease duration with your business plan ensures you’re not paying for equipment longer than you need it—or scrambling to renew before you’re ready.

Questions to ask providers

When evaluating leasing options, it helps to ask targeted questions upfront:

• Does the provider offer flexible leasing options? Not all leasing companies are alike—some specialize in biotech and understand milestone-driven timelines, while others operate more rigidly.
• How are service, liability, and insurance handled? Clarify who covers repairs, preventive maintenance, and coverage for accidental damage.
• What happens if your needs change mid-term? Can you swap or upgrade equipment without heavy penalties?
• How are end-of-lease options structured? Make sure you understand whether you’ll be able to return, renew, or purchase the equipment—and under what terms.

In our experience working with biotech companies across incubators and new labs, the most successful leases come from transparency on both sides: startups that ask the right questions and providers that understand the realities of early-stage science.

Leasing in Practice for Biotech Startups

When leasing makes the most sense

Leasing is especially valuable in the early stages of building a biotech company, when cash is tight and milestones are everything. New labs setting up in incubators often rely on leasing to get operational quickly without the weight of large upfront costs. The same applies to short-term projects, where purchasing equipment that might only be used for a year or two doesn’t make financial sense.

Fundraising cycles are another factor. Many startups lease equipment to bridge the gap between early grants, seed funding, and Series A rounds. By preserving cash for people and science, companies can generate data faster—positioning themselves for the next raise without sacrificing infrastructure.

Practical scenarios in the life sciences

Consider a diagnostics startup entering an incubator. The team needs a high-throughput analyzer to validate its assay, but purchasing would tie up $250,000 of limited seed funding. By leasing instead, the company can pay predictable monthly installments, conserve working capital for reagents and personnel, and still generate the validation data needed to secure its next fundraising round.

Or take a preclinical therapeutics company. Its research program requires cutting-edge mass spectrometry for proteomics studies. Buying the equipment outright risks overspending on a single asset, especially if the program shifts direction. A lease provides flexibility: the team can access the instrument now, hit key milestones, and decide later whether to continue, pivot, or upgrade.

Even entrepreneurs outfitting their first dedicated lab space benefit from leasing. Imagine moving from a shared incubator to a 1,200-square-foot facility. Instead of overspending on a fully equipped lab build out, the founders lease only the core equipment needed to start running experiments. As programs grow and milestones are reached, they layer in additional instruments—scaling the lab step by step, without straining cash flow.

These scenarios highlight how leasing helps streamline workflows while reducing operational risk. Startups can focus on intellectual property and scientific progress rather than navigating procurement headaches or sinking precious capital into owned equipment that may not fit future needs.

Need lab equipment without draining your budget? Excedr’s leasing program helps biotech startups access the tools they need while preserving cash flow for R&D and growth.

Learn more.