Fitout finance, in three simple steps

What is fitout finance?

A fitout turns an empty or tired space into somewhere your business can trade. For a café, it’s the counter, kitchen, plumbing and seating. For a dental clinic, it’s surgeries, cabinetry and specialised services. For an office, it’s partitions, lighting, data cabling and meeting rooms.

Fitout finance is any funding used to pay for that work. It isn’t a single product so much as a purpose, and the funding has to be chosen carefully because of one quirk of fitouts.

Why are fitouts tricky to finance?

Because most of the money disappears into the building. Once walls are framed, benches installed and cables run, they become part of the premises. A lender can’t easily repossess a plastered wall or a built-in bench and sell it.

That’s the key difference from equipment. A coffee machine or a dental chair can be removed and resold, so it can secure its own finance. Fitout works usually can’t. As a result, fitouts are usually funded in one of three ways:

Funding route	How it works	Best for
Unsecured loan	Sized on your turnover and bank statements, typically $5k – $500k	Established, trading businesses
Property-secured loan	Backed by residential or commercial property, $20k – $5m	Larger fitouts, newer ventures, credit issues
Equipment finance (movable items only)	The item secures itself	Ovens, chairs, displays, technology

Many good fitout plans use a combination: equipment finance for the movable items, and an unsecured or property-secured loan for the built-in work.

How do I plan a fitout budget?

Three steps keep the budget honest:

1. Get detailed quotes. Separate the builder’s work, joinery, electrical, plumbing, signage and furniture. Vague totals hide cost blowouts.
2. Add the hidden costs. Permits, council approvals, design fees, compliance certificates and a contingency for surprises once walls are opened up.
3. Fund the gap before revenue. Rent, wages and opening stock start before the first customer walks in. Budget for those weeks.

Illustrative example only. A physiotherapist signing a lease on a ground-floor tenancy prices the fitout at a certain figure. Adding permits, a ten per cent contingency and two months of pre-opening rent and wages lifts the real need noticeably. Borrowing the full figure up front avoids a stalled project and a second, rushed application.

If you’d like a specialist’s view on structure, send a 60-second enquiry. We’ll call, and there’s no credit check to ask.

What will lenders want to see?

• Quotes and scope of works, ideally itemised
• The lease, including term and any landlord contribution
• Business bank statements, for unsecured lending
• Financials or a business plan, especially for a new site. Business.gov.au notes that lenders may ask for a business plan, financial reports, forecasts and lease agreements.
• Property details, if offering property as security

A longer lease often helps, because the lender can see that the business will be trading from the fitted-out space long enough to benefit from it.

Can my landlord help?

Often. It’s worth asking about:

• A landlord fitout contribution, sometimes offered for longer leases
• A rent-free or reduced-rent period while the fitout is completed
• Make-good obligations, so you know what you’ll need to remove at the end of the lease

Every dollar the landlord contributes is a dollar you don’t need to borrow.

Fitouts for franchises and second sites

Franchise fitouts often follow a prescribed design with set suppliers, which helps lenders understand the cost. Our franchise finance page covers that path. Opening a second site of an existing business is usually easier to fund than a first, because the lender can see how the original site trades.

How do I keep a fitout on budget?

Most fitouts that run over budget do so for predictable reasons. Three habits keep yours on track:

• Lock the design before the quote. Changes made after work starts cost more than the same changes made on paper. Agree layouts, finishes and equipment positions first.
• Get like-for-like quotes. When comparing builders, make sure each quote covers the same scope, including demolition, waste removal, services and making good. A cheap quote that leaves things out isn’t cheap.
• Hold a contingency and protect it. Treat the contingency as money for genuine surprises, such as old wiring behind a wall, not for upgrades you decide on halfway through.

It also helps to sequence the funding. Movable items like ovens, chairs and display units can often be ordered on equipment finance close to opening, so you’re not paying for them while the builders are still on site. Built-in work is usually funded upfront through an unsecured business loan or, for larger projects, property-secured lending.

If you’re taking a lease on new premises as part of the project, read the commercial property loans page too. Some owners discover that buying the premises makes more sense than fitting out someone else’s building.

Ready to build out your space?

A well-funded fitout means opening on time, on budget and with cash left in the tank. A poorly funded one stalls when you can least afford it.

When you get in touch, we won’t run a credit check at the enquiry stage. A real person reads your details and calls you, and your information isn’t scattered to a long list of lenders. Please give accurate figures on the form, especially the fitout budget, your turnover and any property, so we can point you to the right mix of funding first time. Start your fitout finance enquiry.