Can the funding include installation, software, warranties and maintenance?

Short answer: yes — many business finance options can cover “soft costs”

Yes. In many UK business finance agreements, eligible “soft costs” such as installation, software, extended warranties and maintenance contracts can be included alongside the hardware or equipment itself. Whether they can be bundled — and to what percentage — depends on the funding product, the provider’s policy, and your sector.

As an independent introducer, Best Business Loans helps you understand which finance types commonly allow soft costs and introduces you to providers who accept them. Your Quick Quote helps us match you with lenders or brokers who are active in your industry and comfortable with your specific cost mix.

Funding is always subject to provider criteria, status and affordability checks, and the detailed breakdown of your project costs.

What do lenders mean by “soft costs”?

Soft costs are non-physical project expenses that support the purchase, setup and ongoing performance of equipment or systems. Typical examples include delivery, installation and commissioning, software licences and integrations, and extended warranties or maintenance plans.

By contrast, “hard costs” are the tangible items like machinery, plant, vehicles or IT hardware. Many asset-based funders are most comfortable financing hard costs, but a sizeable proportion will also allow a percentage of soft costs if they are essential to making the asset usable.

The allowable soft-cost percentage varies. Some providers cap this at 10–30% of the total funded amount, while others can cover higher levels for turnkey projects, technology stacks or sector-specific packages.

When soft costs are more likely to be approved

Soft costs are commonly permitted when they are clearly linked to the financed asset and deployed at the point of purchase or installation. Examples include commissioning an industrial machine, integrating a new software licence with purchased hardware, or pre-paying a manufacturer warranty that mirrors the finance term.

Providers also look for clear, itemised supplier quotes and contracts that evidence the need and value of each soft-cost line. The more transparent your documentation and project plan, the easier it is for a funder to assess and include these costs.

Where a soft cost is ongoing and not tied to a fixed asset, lenders may prefer a separate agreement or a working capital facility instead of bundling it into an asset finance deal.

What exactly can be included — and what are the limits?

Subject to provider approval, many projects can include a mix of the following soft costs in the funding amount. The exact treatment depends on the finance type, your business profile and sector norms.

Here are the most commonly accepted categories:

• Delivery, installation and commissioning of machinery, IT or plant.
• Software licences that are integral to the asset’s operation.
• Extended warranties tied to the manufacturer or vendor.
• Maintenance and service contracts, often when pre-paid and aligned to the finance term.
• Training and handover where essential to safe and effective use.
• Cabling, racking, mountings and minor works that enable installation.
• Project management and integration when clearly linked to the asset deployment.
• Initial consumables or tooling required for commissioning.

Providers may set caps by category, require separate schedules, or stipulate that support contracts are cancellable and transferable. If a cost does not clearly relate to the financed asset, it may be excluded.

Installation and commissioning

Installation, configuration and commissioning are frequently included because they determine when an asset becomes productive. This applies across sectors — from CNC machines, printing presses and refrigeration units to server infrastructure and point-of-sale systems.

Lenders typically want the installer and supplier to be reputable and appropriately insured. They also prefer a fixed-price or clearly itemised contract rather than vague estimates.

If site works are substantial or structural, a separate project facility or staged payments may be more suitable than a standard asset finance agreement.

Software — licences, subscriptions and integrations

Perpetual licences that are essential to operating the financed hardware can often be included. Examples include control software for industrial machinery, security suites for network devices, or ERP modules that run a new production line.

Subscription software (SaaS) can be more nuanced because it is intangible and cancellable. Some technology finance providers will fund multi-year prepaid SaaS when it is mission-critical and co-terminus with the agreement.

Integrations and customisation may be financeable if they are needed to make the system work, but long or speculative development projects are often better funded via a working capital loan.

Warranties and maintenance

Manufacturer warranties and service plans are widely accepted when prepaid and time-aligned with the finance term. Lenders like the risk mitigation that comes with preventative maintenance by qualified engineers.

Ad-hoc or pay-as-you-go servicing is harder to finance because costs are uncertain. Where support is priced monthly, some funders will permit a proportion to be capitalised if the contract is firm and transferable.

Keep a copy of warranty terms, service intervals and response SLAs. These documents help providers assess whether the contract genuinely protects asset uptime and value.

Which funding types allow soft costs — and how do they treat them?

Different products handle soft costs differently. Understanding how each one works helps you choose the right route and structure your proposal for approval.

Asset finance: hire purchase and finance lease

Hire Purchase (HP) and Finance Lease are commonly used to fund equipment and vehicles. Both can often include a portion of soft costs, especially delivery, installation and essential software.

With HP, you typically aim to own the asset at term end, so warranties and pre-paid service that maintain residual value can be helpful. Finance Lease may capitalise soft costs into rentals, with ownership retained by the funder.

Expect providers to cap soft costs or request them to be itemised on invoices. Where the soft component is high, they may require a higher deposit or shorter term.

Equipment loans and technology finance

Unsecured or secured equipment loans can be flexible on soft costs, particularly for technology stacks that blend hardware, software and configuration. The lender relies more on your cash flow than on the asset alone.

Technology finance specialists may finance entire solutions — servers, endpoints, networking, licences, deployment, security and multi-year support. They often structure agreements so all elements co-terminate.

For IT refresh cycles, a refresh option or rolling bundle can keep systems current while spreading total ownership cost.

What usually cannot be included?

Invoice finance and factoring release cash against receivables; they do not typically fund specific project soft costs. Grants, tax incentives or R&D credits may complement funding but are outside commercial lending’s scope.

Working capital loans can pay for soft costs indirectly, but they are not linked to a specific asset and are priced accordingly. Property works, civil engineering or large-scale fit-out may require a specialist facility.

Always ask whether VAT, deposits or staged milestone payments can be included. Many UK providers offer VAT-only loans or will fund VAT alongside the main agreement, subject to status.

Sector examples where soft costs are routine

Construction plant with commissioning and extended warranty is often funded as a package. Manufacturing machinery plus control software and operator training are common inclusions.

For services contractors and M&E firms, turnkey equipment, tools, testing devices and calibration support are regularly bundled. If that’s your world, read more about our sector support for building services loans.

Healthcare and care providers frequently bundle medical devices with installation, safety certifications, and full-service agreements to protect compliance and uptime.

How to structure your application so soft costs are approved

A clear, transparent case package helps funders assess and include your soft costs. Here is a practical approach many lenders prefer.

Steps to take

1. Itemise everything: ask your suppliers to separate hard and soft costs on quotes and invoices.
2. Tie costs to outcomes: explain how each soft cost makes the asset operable, compliant or safer.
3. Align terms: match warranty and maintenance durations to the finance term wherever possible.
4. Choose the right product: opt for HP, lease or tech finance where soft costs are commonly accepted.
5. Provide proof: add contracts, SLAs, commissioning plans and training outlines as supporting documents.
6. Plan VAT: confirm whether VAT is included in the funding or handled via a VAT loan.
7. Consider staging: for complex installs, propose phased drawdowns against milestones.

These steps reduce ambiguity and help providers underwrite the full solution, not just the headline asset price. It can also speed up time to decision and deployment.

Documentation lenders typically ask for

• Supplier quotations with separate lines for equipment, installation, software, and service plans.
• Copies of software licence terms, warranty coverage, and maintenance schedules or SLAs.
• Evidence of insurance, certifications and installer competence where relevant.
• Project plan with key dates for delivery, commissioning and handover.
• Company financials and management information to assess affordability.

If you are coordinating multiple suppliers, include a high-level plan and who is responsible for each phase. This helps the lender understand dependencies and risk controls.

Where you have negotiated vendor finance promotions, share them early. Some funders can work with vendor-subsidised rates or support packages if they meet underwriting standards.

Typical approval criteria and caps

Expect providers to prefer soft costs that are one-off, pre-paid and directly linked to the financed asset. They often cap the soft-cost proportion and require any ongoing elements to be cancellable or transferable.

If soft costs exceed caps, a blended approach may work, such as asset finance for hardware and a short-term working capital facility for balance-of-project services. Your options will depend on credit profile and sector.

Our role is to help you present a clear case and connect you with funders whose policies fit your project.

Costs, risk, compliance — and your next step

Including soft costs can affect pricing, terms and deposit levels because a portion of the facility funds intangibles. Lenders may adjust rates, security or covenants to reflect asset recoverability and residual value.

Where maintenance contracts reduce downtime and repair risk, some funders view them positively. Conversely, large, speculative development work may be priced more conservatively or excluded.

Always compare overall cost of ownership and cash flow impact rather than headline rates alone. The right structure often saves time, reduces risk and preserves working capital.

Important compliance and fairness notes

Best Business Loans is an independent introducer. We do not provide credit or give regulated advice; we help you explore options and connect with suitable lenders or brokers.

Any finance is subject to status, eligibility, affordability checks and the provider’s terms. Rates, fees and product availability can change and may vary by sector and credit profile.

All information on this page is intended to be clear, fair and not misleading. Please verify details with any provider before committing.

FAQs

Can VAT, delivery and training be included? Many providers will include VAT, delivery and essential training, sometimes via a VAT-only loan or as part of the main agreement. This is subject to provider policy and proper itemisation.

What percentage of soft costs can be funded? Caps vary widely. Some lenders allow 10–30%, while others may fund higher levels for turnkey solutions or technology stacks with strong documentation.

Can monthly maintenance fees be financed? Prepaid maintenance matching the finance term is more acceptable than open-ended monthly fees. Some funders will capitalise a portion of contracted support if it is transferable and cancellable.

Are SaaS subscriptions financeable? Multi-year, mission-critical SaaS can be financeable through specialist technology finance. Month-to-month or easily cancellable subscriptions are harder to include.

Will including soft costs increase my rate? Possibly. Pricing reflects risk and recoverability. However, bundling essential services can reduce downtime risk and may support value preservation.

Key takeaways

• Yes — installation, software, warranties and maintenance can often be funded when essential to the asset.
• Expect caps, documentation requirements and alignment of service terms with finance terms.
• HP, leases and technology finance tend to be most flexible on soft costs.
• Clear, itemised quotes and a staged plan increase approval likelihood and speed.
• We introduce you to providers who are active in your sector and comfortable with your cost mix.

Ready to check eligibility? Complete a Quick Quote for a no-obligation introduction to suitable lenders or brokers. It takes a couple of minutes and won’t affect your credit score to enquire.

Updated: October 2025 — Information may change; please confirm details with providers.