Can solicitors fund a new Practice Management System (PMS) through asset finance?

Short answer: Yes — many law firms can fund a new Practice Management System (PMS) using asset finance, but eligibility and the best route depend on the PMS type (on‑premise vs SaaS), contract length, and lender appetite. This guide explains how software is treated by lenders, common finance options, costs, VAT and tax considerations, what lenders look for, alternatives, and next steps. Ready to see your options? Get Quote Now — Free Eligibility Check.

What is asset finance?

Asset finance is a way to acquire equipment or software by spreading the cost over time rather than paying upfront. Instead of a single business loan, the finance is secured against the asset (or the supplier contract) and repayments are structured to match the asset’s useful life.

Key forms relevant to PMS funding:

• Hire Purchase (HP): you pay monthly and own the asset at the end when the final payment is made.
• Finance lease: the lender owns the asset; you hire it for a term and may have a residual or option to acquire.
• Operating lease / subscription funding: more like renting; useful for SaaS or short‑term licence needs.
• Vendor finance & blended packages: supplier and funder work together to spread payments.

Asset finance differs from unsecured business loans and working capital facilities: it’s designed to fund specific capital items or contracts rather than general cashflow.

Can a PMS count as an asset?

Whether a PMS counts as an asset for finance depends on how the software is licensed and delivered.

• On‑premise or perpetual licences (owned software): treated as capitalised assets. Lenders commonly fund these via HP or finance leases because there’s a tangible licence or hardware to secure against.
• Hosted/perpetual licence: often fundable — the licence is still considered an asset even if hosted by a third party.
• SaaS / subscription models: usually treated as operating expenditure. Some specialist funders will finance SaaS where there are fixed‑term contracts or committed revenues; others will not. Lenders underwriting SaaS funding often look for contract length and recurring income proof.

Accounting and tax treatment varies: some firms capitalise software costs; others expense subscription fees. Always run funding decisions past your accountant to confirm implications for capital allowances and profit & loss.

Typical asset finance options for PMS

Hire Purchase (HP)

HP lets you spread the purchase cost over an agreed term and usually transfers ownership at the end. Pros: predictable payments and ownership. Cons: may require VAT upfront (depending on funder) and can increase balance sheet assets. Typical terms: 24–60 months.

Finance Lease

With a finance lease the lender retains ownership and you pay to use the asset. Payments can be lower than HP; ownership usually doesn’t transfer automatically. Useful when you want off‑balance-sheet solutions or lower initial outlay.

Operating Lease / Subscription Funding

Best suited for SaaS or when you prefer not to show the asset on your balance sheet. Some funders will provide rolling facilities that cover licence fees or pay the vendor and bill you monthly.

Vendor finance & blended packages

Many PMS vendors offer staging or vendor finance. Brokers can combine vendor offers with asset finance to create a blended package that reduces initial cash impact.

Asset refinance / leaseback

If you already own servers or perpetual licences, leaseback can unlock cash tied up in those assets.

Indicative terms (guide only): terms typically 24–60 months; deposits 0–30% depending on lender and credit profile; pricing and APR vary widely with credit and security — discuss with a broker for tailored quotes.

What lenders and brokers look for

Underwriting for solicitors seeking PMS funding typically focuses on:

• Business structure & trading history: company or LLP details and how long you’ve traded.
• Turnover & profitability: recent accounts and management accounts matter.
• Client retainer and fees: predictable recurring revenue improves chances.
• Credit profile: both the firm and key directors.
• Supplier documents: quotes, licence terms and SaaS contract length.
• Security: lenders may request a company charge or personal guarantees depending on size and credit.

Practical checklist to prepare:

• Latest 1–3 years of accounts (or management accounts if available)
• Supplier quote and full licence/service agreement
• Evidence of recurring fee income or retainer arrangements
• List of any existing charges or finance on the company

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Cost, VAT and tax considerations

VAT: If the PMS purchase attracts VAT, the VAT is usually payable on the invoice. Some funders require VAT to be financed upfront; others expect you to settle VAT and fund the net amount. Clarify this with the finance partner before signing.

Tax & capital allowances: Capitalised software and hardware may qualify for capital allowances. Subscription costs are typically treated as operating expenses. Speak with your accountant to confirm treatment for your firm — this page does not provide tax advice.

Cashflow impact: Asset finance smooths large one‑off payments into predictable monthly costs, preserving working capital for operations or growth.

Pros and cons for solicitors

Pros

• Preserves cashflow and working capital
• Enables immediate upgrade to modern PMS with predictable budgeting
• Can include installation, training and maintenance within a package

Cons

• May cost more over the long term than an outright purchase
• SaaS models can be complex to underwrite — not all funders will finance subscriptions
• May require security or guarantees depending on lender

Decision guide: if you are buying a perpetual licence and want ownership, HP or a finance lease is often a good fit. If you are moving to SaaS with multi‑year contracts, look for lenders that specialise in subscription financing or consider using operating budget if contract terms are short.

Alternatives to asset finance

• Business loan: unsecured or secured term loan for flexibility (may be better for mixed use purchases).
• Invoice finance: if you need short‑term cashflow while implementing a new PMS.
• Vendor payment plans: staged payments arranged with the PMS supplier.
• Subscription from operating budget: pay-as-you-go for SaaS without financing.
• Leaseback/refinance: if you already own hardware or licences.

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Short example case studies

Case study — Small solicitors’ firm (3 fee-earners)
Problem: needed a hosted PMS and new servers but had limited cash. Solution: hire purchase for servers + a short operating lease for the hosted licence. Outcome: monthly payments over 36 months preserved working capital and included installation costs.

Case study — Medium regional firm
Problem: migrating from aged on‑premise software to a full SaaS PMS with 5‑year supplier support contract. Solution: blended package where vendor provided a discount and a specialist funder financed the 3‑year committed licence. Outcome: smooth migration with predictable monthly cost and minimal deposit.

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How UK Business Loans helps

UK Business Loans connects solicitors’ firms to finance brokers and lenders who can advise on asset finance for PMS projects. We do not supply loans ourselves — we match your enquiry to lenders/brokers who specialise in software and professional services financing.

Typical process:

1. Complete a short enquiry form (takes around 2 minutes).
2. We match your firm to suitable brokers/lenders based on the PMS type and your business profile.
3. You receive contact and tailored quotes to compare.

Our service focuses on introductions and is free to use. If you’re ready to see what’s possible, Get Quote Now — Free Eligibility Check.

For more sector-focused resources see our solicitors sector overview on solicitors business loans.

FAQs

Can I finance cloud-based (SaaS) PMS?

Some funders will finance SaaS licences if you have fixed‑term contracts or evidence of committed recurring revenue. Options vary — complete our enquiry so we can match you to suitable brokers.

How much deposit do lenders typically need?

Deposits range from 0% to around 30%, depending on lender, firm credit profile and the nature of the software/hardware being financed.

Will a finance application affect our credit rating?

Initial soft eligibility checks may not affect credit. Lenders usually perform a full credit search later in the process — your broker will confirm before proceeding.

How long does approval take?

With prepared documents, many broker introductions lead to offers within 48–72 hours; full funding times vary by lender and complexity.

Do directors need to give personal guarantees?

Some lenders request personal guarantees for smaller firms or weaker credit profiles. Requirements vary — matching with the right lender reduces the need for unnecessary security.

Is VAT payable through the finance?

VAT treatment depends on whether the purchase attracts VAT and funder policy. Some funders require VAT to be financed, others expect it paid upfront. Ask your broker to clarify.

Next steps

If you’re considering a new PMS and want to explore asset finance options, complete a short enquiry form and we’ll match you to brokers and lenders experienced in financing software for solicitors’ firms. Our service is free and no obligation.

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UK Business Loans is an introducer. We do not lend money or provide regulated financial advice. We connect your enquiry with lenders and brokers who can offer tailored finance solutions. Use of our service is free and no obligation. Always consult your accountant or legal adviser about tax, accounting and contract decisions.

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1. Can solicitors fund a new Practice Management System (PMS) through asset finance?
Yes — many law firms can fund a new PMS with asset finance, though eligibility depends on whether the software is on‑premise/perpetual or SaaS, contract length and lender appetite.

2. Can cloud‑based (SaaS) PMS licences be financed?
Some specialist funders will finance SaaS licences where there are fixed‑term contracts or committed recurring revenue, but underwriting is generally stricter than for perpetual licences.

3. What asset finance options can we use for a PMS?
Common routes are Hire Purchase (HP), finance lease, operating lease/subscription funding, vendor finance or blended packages, typically over 24–60 months.

4. How much deposit will lenders typically require for PMS finance?
Deposits vary by lender and credit profile but typically range from 0% to around 30%, with some funders offering low or zero‑deposit options.

5. How much can we borrow to fund a PMS purchase or migration?
Most funders start from around £10,000 and upward, with maximums set by lender criteria and your firm’s credit, turnover and security position.

6. What documents do lenders need to approve asset finance for a PMS?
Prepare supplier quotes, full licence/service agreements, the latest 1–3 years of accounts or management accounts and evidence of recurring income or retainer arrangements.

7. Will applying for PMS asset finance affect our business credit score?
Initial eligibility checks may be soft and not affect credit, but lenders usually perform a full (hard) credit search later in the application process.

8. Do directors need to provide personal guarantees for PMS finance?
Some lenders may require personal guarantees or company charges for smaller firms or weaker credit profiles, though matching to the right lender can reduce this risk.

9. How is VAT and tax treated when financing a PMS?
VAT treatment depends on supplier and funder—some finance the VAT element while others expect it paid upfront—and tax treatment (capital allowances vs operating expense) depends on whether the software is capitalised, so consult your accountant.

10. What are alternatives if asset finance isn’t suitable for our PMS project?
Alternatives include unsecured or secured business loans, invoice finance, vendor payment plans, paying SaaS from operating budgets, or leaseback/refinance of existing hardware or licences, and UK Business Loans can match you to brokers who specialise in these options.