Can I finance IT hardware, software, or technology upgrades?

Short answer

Yes — many UK businesses can finance IT hardware, software and technology upgrades using a range of commercial finance products.
How you finance these items depends on whether the cost is capital expenditure (like servers or laptops) or an ongoing operating cost (like SaaS subscriptions), and on lender eligibility criteria.

What types of technology costs are financeable?

Many categories of technology spend can be financed, including physical IT hardware such as servers, desktops, laptops, printers and network kit.
Software can also be financed whether acquired outright (perpetual licence) or as a subscription, though lenders treat licences and SaaS differently.
Other eligible upgrades include data centre work, cloud migration projects, cybersecurity tools, specialist industry software and some integration or implementation costs.

Asset finance and equipment leasing are commonly used for physical hardware which has a definable lifespan and resale value.
For software, options include capitalising perpetual licences with hire purchase or using working capital, invoice finance or vendor financing for implementation costs.
Ongoing subscriptions are often funded from operating budgets, but some funders will package recurring SaaS into a structured finance deal if contract terms are suitable.

Specialist tech lenders and brokers increasingly work with UK SMEs to fund digital transformation projects.
Government schemes or sustainability-linked funding may also help when upgrades improve energy efficiency or reduce emissions.
Best Business Loans does not lend directly but can introduce you to lenders and brokers that specialise in these solutions.

What lenders and brokers look for

Lenders consider the nature of the asset, contract length, expected useful life and residual value.
They will also check your business credit profile, trading history, sector risk and cashflow forecasts to assess affordability.
For software, lenders want to see clear licence terms, assignment rights and information on renewal/cancellation clauses.

Age of the business matters: established SMEs with trading history and positive accounts generally get better terms.
Security is often taken over the financed asset or charged as an unsecuritised facility against the business; some deals require personal guarantees for smaller firms.
VAT status is also relevant because VAT is payable on most equipment purchases and may be included in finance agreements or settled separately.

Implementation and maintenance contracts influence underwriting; strong supplier warranties and support contracts reduce lender risk.
If you buy from a recognised vendor or authorised reseller, that improves lender confidence and simplifies documentation.
Early engagement with a broker or introducer helps identify lenders that actively finance your asset type and sector.

Finance products suited to hardware, software and upgrades

Equipment finance and hire purchase are common for tangible IT hardware, allowing you to spread cost and often acquire the asset at term-end.
Finance leases let you use equipment for a fixed term but ownership usually stays with the lessor, which can be tax-efficient depending on your accounting treatment.
Operating leases are an alternative for short-life tech where upgrades are frequent; they keep tech off your balance sheet in some cases.

For software that is bought outright, hire purchase or asset finance can treat the licence as a capital asset.
Subscription software (SaaS) is usually an operating expense and can be included in cashflow or working capital facilities, or financed via a tailored solution where contract terms are long enough.
Invoice finance and business loans provide flexibility for project-based spending such as implementation, consultancy and integration costs.

Vendor finance, manufacturer leasing and supplier deferred payment arrangements are often available and can be attractive for bundled hardware + software deals.
For older equipment, sale-and-leaseback can unlock capital tied up in existing assets to fund new upgrades.
If you’re specifically looking for equipment-focused options, learn more about equipment finance here: equipment finance.

How to prepare your business for a technology finance application

Gather clear quotes from suppliers that separate hardware, software licences and implementation fees.
Prepare recent accounts, management cashflow forecasts and a short project brief that explains benefits and expected returns.
List asset life estimates, warranty details and any disposal or trade-in values for old equipment.

For software, include licence agreements, SaaS contracts and vendor terms so lenders can check assignability and renewal dates.
If your upgrade includes subscriptions or support contracts, highlight contract length and automatic renewal clauses.
Show how upgrades will improve efficiency, revenue, or cost savings to support affordability and risk assessments.

Engage a broker or introducer early to match your profile to lenders who actually fund technology projects.
Best Business Loans helps you by analysing your needs through a quick quote and introducing suitable lenders or brokers.
Completing an eligibility check does not commit you to borrowing but speeds up decision-making and avoids unsuitable applications.

Benefits, risks, tax and next steps

Financing spreads cost, preserves working capital and can accelerate technology refresh cycles that improve competitiveness.
It also helps align payments with the period you get value from the asset, which suits CAPEX-heavy upgrades or large-scale implementations.
However, finance incurs interest and fees, and you should compare total cost against paying outright or phased purchasing.

From a tax perspective, treatment varies by product and business structure; some leases and hire purchase agreements offer capital allowances, while operating leases may be expensed.
Always consult your accountant to understand VAT and corporation tax consequences specific to your deal.
Make sure financing terms match the asset life to avoid paying for obsolete equipment at term end.

Next steps: get multiple supplier quotes, prepare basic financial documents and submit a Quick Quote to check eligibility.
Best Business Loans will introduce you to lenders or brokers that match your industry and funding type, helping you get a decision in principle.
We do not provide finance ourselves and are an independent introducer, so you stay in control of offers and terms you receive.

Key takeaways

• Most IT hardware and many software purchases can be financed using equipment finance, hire purchase, leases or working capital facilities.
• Software subscriptions are treated differently to perpetual licences; lenders assess contract terms and assignability.
• Prepare quotes, contracts and simple cashflow forecasts before you apply to improve approval chances.
• Best Business Loans can match your enquiry to lenders and brokers who specialise in technology funding — complete a Quick Quote to get started.

Frequently asked questions

Can I finance cloud migration or consultancy costs?
Yes — many projects bundle hardware, software and professional services and can be financed via project finance, business loans or invoice finance depending on structure.

Will financing harm my business credit rating?
A single, well-matched application usually causes minimal impact; multiple hard credit applications can affect your rating, so use an introducer or broker to run soft checks and target suitable lenders.

Disclaimer: Best Business Loans is an independent introducer and does not provide lending or regulated advice.
We aim to connect UK businesses with suitable lenders and brokers; any finance offers you receive will come from third-party providers.
Check product details, costs, and eligibility with the chosen lender and seek independent tax or legal advice where required.

Ready to check eligibility? Submit a Quick Quote to receive a free, no-obligation decision in principle and be introduced to lenders or brokers experienced in technology finance.
If you’d like help before submitting, contact our UK support team at hello@bestbusinessloans.ai for guidance on the right funding route.
Start your Quick Quote today and let our AI match your business to the best finance options available.