IT leasing transforms the cost structure of a startup long before it provides a computer. For a young company that hires in waves and sometimes pivots within a few months, the choice between buying and leasing its IT equipment is not a matter of comfort: it alters the financial ratios presented to investors, the ability to absorb a doubling of staff, and the accounting treatment of each workstation.
Accounting for IT leases: what the IFRS 16 exemption changes for startups
Most comparisons between buying and leasing focus on contrasting CAPEX and OPEX. This distinction remains valid, but it masks a crucial technical point for any startup preparing for an international fundraising or consolidation by a listed group.
Since the implementation of IFRS 16, lease contracts must, in principle, appear on the balance sheet as “right of use” and “lease liability.” For a hyper-growth startup, this reclassification increases debt ratios and can complicate compliance with bank covenants.
However, low-value equipment remains eligible for a balance sheet accounting exemption. According to ITWeb, an asset with a new unit price below a threshold of about 5,000 USD (laptops, printers, small servers) can continue to be treated as a simple period expense when leased on a “pay-for-use” basis. To learn more about Marqueting, this mechanism is a financial lever often underestimated by founders.
The lightweight IT equipment of a startup almost entirely falls under this exemption, preserving the clarity of the balance sheet without sacrificing the operational flexibility of leasing.
Buying or leasing IT equipment: comparison table for a growing startup
Rather than listing generic advantages, a structured table allows for a visualization of the concrete differences based on criteria that matter daily.
| Criterion | Purchase | Lease / Leasing |
|---|---|---|
| Initial cash outflow | High (total price) | Low (smoothing monthly rent) |
| Accounting treatment (IFRS 16, asset < 5,000 USD) | Asset + depreciation | Period expense (exemption applicable) |
| Debt ratio | Not impacted | Not impacted (if low-value exemption) |
| Adaptation to a doubling of staff | New complete purchase cycle | Adding positions to the existing contract |
| Obsolescence at 3 years | Risk borne by the startup | Risk transferred to the lessor |
| Maintenance and replacement | To be organized internally or through a provider | Often included in the contract |
This table highlights a rarely emphasized point: buying does not increase the debt ratio, but it consumes the cash that the startup typically reserves for hiring or product development. Leasing, on the other hand, preserves this capital while avoiding reclassification on the balance sheet thanks to the exemption for low-value assets.
Scalability of the IT equipment and wave hiring
A startup that goes from five to twenty employees in six months cannot wait for an annual budget cycle to equip its new hires. Purchasing requires planning for a buffer stock (unused machines while waiting for hires) or accepting a supply delay that slows down onboarding.
Leasing resolves this mismatch through a simple mechanism: the contract allows for the addition or return of positions based on actual needs. The equipment follows the staffing curve instead of preceding it.
This operation also has an indirect effect on financial management. Each leased position represents a predictable unit cost, making it easier to calculate the marginal cost of hiring. The CFO (or the founder acting in that role) can integrate the IT rent directly into the total cost of an employee, without provisioning for an asset.
- Adding positions during the contract without global renegotiation, which follows the actual hiring pace
- Returning unused machines after a pivot or team reduction, avoiding the storage of dormant equipment
- Integrated technological renewal within the leasing cycle, eliminating the risk of working on obsolete machines after two or three years
Risk of obsolescence and IT equipment renewal cycle
A laptop purchased today loses a significant portion of its value in less than three years. For a tech startup, this depreciation does not only translate into accounting: it translates into productivity. A developer compiling on a slow machine loses billable time. A salesperson whose laptop crashes during a meeting loses credibility.
Leasing transfers the risk of obsolescence to the lessor. At the end of the contract (usually three to five years), the startup returns the machines and starts with recent equipment. This mechanism eliminates the issues of the second-hand market, data destruction on old drives, and electronic waste management.
The refurbished ecosystem is progressing rapidly, but it does not meet the same need. A startup that leases new equipment through a leasing contract offloads end-of-life logistics. Those that buy must either resell, recycle, or store. Each of these options consumes management time that small teams do not have.
What type of startup benefits most from IT leasing
Not all young companies benefit equally from this model. The trade-off depends on the growth rate, the type of equipment required, and the funding trajectory.
- Startups in pre-Series A phase anticipating a transition to IFRS standards: the exemption for low-value assets allows them to maintain a readable balance sheet without giving up up-to-date IT equipment
- Companies with fluctuating staff levels from quarter to quarter: leasing absorbs these variations without tying up capital
- Organizations whose core business relies on high-performance workstations (software development, design, data science): regular equipment renewal maintains productivity
Conversely, a stable startup with few expected hires and limited equipment needs (a few office positions) may sometimes find it simpler to buy refurbished equipment and manage a small inventory internally.
The choice rarely boils down to a question of monthly price. It is the combination of growth rate, accounting requirements, and internal management capacity that determines whether IT leasing represents a structural advantage or merely operational comfort.