A non-cancellable lease agreement is a document that is typically signed when leasing business equipment and does not include a termination clause. Non-cancellable components are typical in financial and full payout leases.
These long-term leases are non-cancellable in nature because they allow for businesses to acquire equipment for an extended period of time on a rental basis. Businesses are typically required to maintain and insure the equipment during the length of the non-cancellable lease.
Renting business equipment through a non-cancellable lease frees up working capital and can allow businesses to furnish their locations with top-of-the-line pieces without obtaining financing approval through a banking institution.
Read More: Simple Lease Rental Agreement
It is important for business owners to carefully evaluate their options and read through their non-cancellable leases thoroughly prior to lease execution, as the lack of an escape clause will limit their legal options in the event of an early lease termination.
Luca Cusolito began writing in 1997. She utilized her web design skills to self-publish her short stories and articles. She writes most frequently about real estate, wine and beauty products. Cusolito studied communications at Florida Atlantic University.