SME Finance Options for Technology Projects in 2023

Deploying the best-in-class ERP software in your business in 2023 doesn’t have to break your IT budget. There are now various options available for organisations who are looking to replace their systems and to spread the cost of these projects.

At SEIDOR we’re able to work alongside your organisation to deploy popular ERP solutions such as SAP Business One and SAP Business ByDesign with our range of finance options.

Here are some of the most popular options available to UK SMEs who are in the market for a new system this year:

Technology Loan

Projects for ERP systems, like SAP Business One, are best financed using a technology loan. With any new deployment, organisations have to factor in the cost of user licenses alongside costs for consultancy and training days – which typically account for the majority of costs.

Although tech loans can cover the full costs of projects, certain lenders also offer the option to finance non-license costs. This means that an SME can pay for licenses up front, and then finance consultancy, support, training and any development work that’s required. As long as the transaction is technology-related, lenders will typically consider this finance route.

Importantly, no personal guarantees are required for these types of loans. Lenders often appreciate that ERP projects are significant investments for SMEs and they will have been researched and analysed accordingly.

VAT can be included within the finance package and then claimed back in the traditional way, which is often used by organisations as a cash injection for other projects within the company.

Just like any loan, the vendor receives the agreed funding directly and funds are released by lenders as soon as the project commences.

Rates for technology loans typically depend on a customer’s credit profile. However, the majority of tech loan lenders that offer these loans are Tier 1 lenders, so they are always able to offer competitive rates to fund your next project.

Super Deduction offer

The new Super Deduction scheme is also worth investigating by small businesses looking for a new system. Businesses can claim up to 130% of first-year relief in the form of capital allowances on qualifying plant and machinery investments.

These ‘investments’ include computer equipment and servers. This means that for every pound spent on qualifying assets, up to 25% can be deducted from a corporation tax bill.

The expenditure of these assets must be new and incurred before 31st March 2023, so time is running out to take advantage of this scheme.

Corporation Tax Increase

Corporation Tax is increasing from April 1st 2023 from 19% to 25%. This big increase will obviously affect the profits that organisations make in their next affected financial year.

However, although this is an important factor that will impact organisations with profits in excess of £50,000, it also opens up new opportunities – especially for corporation tax exposure.

For instance, if a company that is deploying a new system decides to lease its solution as opposed to applying for a loan, it can heavily reduce their corporation tax when leasing assets.

What’s right for you

Want to find out more about our range of small business finance options for your project in 2023? Get in touch with one of our experts today on 01932 212 777 to find out more and to arrange a quotation.