How Long Should I Sign a Commercial Lease For?

When you’re signing a new commercial lease it’s important to try and find the right balance between a long enough lease to let your get your business up and running and a short enough lease to be able to cover the costs if your business fails.

However, this isn’t always easy. Many landlords will want you to sign a long-term lease that’s at least 5 years, and they might try and pressure you into this. It’s important to make sure that you don’t let yourself be pressured in situations like this, otherwise you might regret it later. Make sure that you employ the services of a decent property lawyer to help you negotiate your lease, and make sure that you’re clear on the fine print.

Ultimately, there are a few things you should take into account when deciding how long to sign a commercial lease for. We’ve outlined some of the most important below.

Consider Your Business Vision

It doesn’t matter how long your business has existed for, or even if it’s brand new. If you’re serious about building it and expanding your services in the future, you need to take this into account.

If your business does grow, you might end up wanting to relocate to larger premises at some point. This can be hard if you’re locked into a long-term lease.

Work closely with your commercial lawyer to negotiate a lease that either: (1) only lasts for a short time or (2) gives you an exit clause if you need to find larger premises.

Consider Your Business Age

If you’re attempting to build a new business that may or may not succeed then you also don’t want to get stuck with a long-term lease. In this case, you should attempt to negotiate a short lease with the option of extending it in the future if you need to. Be aware that you might need to pay a bit more rent if you go down this path.

Consider Long Term Security

On the other hand, it could work in your favour to negotiate the longest lease possible. If you already have an established business that you plan on running steadily for years into the future then a long-term lease could work best for you.

It will give you the security and freedom to grow your business steadily. You will be able to invest in things like equipment, infrastructure, stock and training without worrying about having to change premises in the short term.

Final Word

Deciding how long to sign a commercial lease for can be hard. Ultimately, you need to try and find a balance between getting a long enough lease to provide business security so that you can grow and invest in your business and a short enough lease that you won’t be ruined financially if your business fails.

Before signing a commercial lease there are two people you should talk to – a reputable business advisor and an experienced commercial lawyer. Good luck!