Quick answer
Fit-out finance funds the work that turns an empty tenancy into a working business — partitions, kitchens, joinery, flooring, lighting, plumbing, signage and fixtures. Because much of a fit-out has little resale value, it's often funded with a mix: equipment finance for removable items, plus an unsecured or property-secured loan for building works. Lenders usually want quotes and a signed lease.
Key points
- Covers building works, joinery, kitchens, lighting, signage and fixtures.
- Removable equipment can often go on equipment finance; building works need other funding.
- Lenders want detailed quotes and usually a signed lease.
- Budget for the surprises — fit-outs rarely come in under quote.
There’s a moment in every new premises when it stops being a shell and starts being yours — the counter goes in, the lights come on, the sign goes up. Getting to that moment costs real money, usually all at once, usually before you’ve made a cent from the new space. Fit-out finance spreads that cost over the years the space will be earning for you.
What is fit-out finance?
It’s funding for the physical works that make a premises fit for business: demolition, partitions, ceilings, flooring, electrical, plumbing, kitchens, joinery, counters, shelving, lighting, signage, air-conditioning and fixed furniture. It applies to new tenancies, relocations, expansions and refurbishments.
There’s no single “fit-out loan” product. Instead, fit-outs are usually funded with a combination:
| Part of the fit-out | Common funding |
|---|---|
| Removable equipment (ovens, coffee machines, IT, dental chairs) | Equipment finance |
| Building works and fixed items | Unsecured business loan or property-backed loan |
| Opening stock and early wages | Working capital loan or line of credit |
| Franchise-specified fit-outs | Franchise finance |
Who is fit-out finance good for?
- Cafés, restaurants and bars — kitchens, extraction, coolrooms, seating. See hospitality.
- Clinics and practices — treatment rooms, plumbing, specialist lighting. See health practices.
- Shops and showrooms — shelving, counters, lighting, signage.
- Offices and studios — partitions, meeting rooms, data cabling.
- Gyms, salons and studios — flooring, mirrors, wet areas.
- Businesses opening a second location.
How does it work, step by step?
- Secure the site. Negotiate the lease, including any landlord contribution or rent-free period.
- Get detailed quotes — itemised, so equipment can be separated from building works.
- Enquire with the total budget, the quotes and your trading history or plan. No credit check to enquire.
- Structure the package. Split removable equipment onto equipment finance and fund the rest appropriately.
- Progress payments. Builders often invoice in stages; the finance is drawn or paid to match.
- Open and repay. Repayments start, ideally sized to what the new space earns.
What are the pros and cons?
| Pros | Cons |
|---|---|
| Spreads a large one-off cost | Building works have little resale value as security |
| Keeps cash free for opening stock and wages | Needs quotes and usually a signed lease |
| Can combine several finance types efficiently | Fit-outs commonly run over budget |
| Lets you open sooner and properly | Lease length must suit the loan term |
| Equipment portion can secure itself | Make-good obligations at lease end add future cost |
What does it look like in practice? (illustrative)
A physiotherapy practice is moving into a bigger tenancy with four treatment rooms and a small gym. The fit-out includes partitions, plumbing, flooring, lighting and reception joinery, plus treatment tables, exercise equipment and IT. The practice puts the removable equipment on equipment finance, and funds the building works with an unsecured loan sized on its trading. The landlord’s contribution reduces the building cost, and a small line of credit covers the first months of extra rent while new clients build up. Illustrative only.
How do you keep a fit-out on budget?
- Get itemised quotes and a clear scope of works.
- Add a contingency — surprises behind walls are the norm, not the exception.
- Check council and building approvals early; delays cost rent.
- Negotiate the lease first — landlord contributions and rent-free periods change the numbers.
- Read the make-good clause. You may need to restore the premises at the end of the lease.
business.gov.au’s budgeting templates are a handy place to lay it all out. If you’d like a person to look at the whole package with you, send us the quotes.
What does a fit-out really cost beyond the builder’s quote?
The builder’s quote is rarely the whole story. A realistic fit-out budget also includes:
- Design and drafting — plans, interior design and any engineering.
- Approvals — council, building surveyor and, for food or health businesses, the relevant registrations and inspections.
- Services upgrades — extra power, grease traps, exhaust or air-conditioning capacity the building doesn’t yet have.
- Equipment delivery and installation, which is often quoted separately.
- Signage, branding and furniture — easy to forget, hard to open without.
- Rent during the build if you don’t negotiate a rent-free fit-out period.
- Opening stock, staff training and launch marketing.
- Contingency — many owners set aside a meaningful buffer on top of the quoted total.
Laying all of this out before you apply helps you borrow the right amount the first time, instead of coming back for a top-up halfway through the build.
How long should fit-out finance run?
Ideally no longer than your lease, including any option you’re confident you’ll take up. Paying off a fit-out after you’ve left the premises is a frustrating place to be. Match the term to the lease, keep the equipment portion on its own schedule, and you’ll finish paying for the space while it’s still earning.
What documents will you need?
- Itemised fit-out quotes or a builder’s contract
- The signed lease or agreement for lease
- Recent business bank statements, BAS and financials (or a plan for new businesses)
- Equipment quotes for any removable items
- ABN or ACN and photo ID
What are the alternatives?
- Equipment finance — for the removable parts of the fit-out.
- Property-backed loan — for larger or newer-business fit-outs.
- Franchise finance — where the franchisor specifies the fit-out.
- Working capital loan — for the opening period after the build.
Ready to build the space your business deserves?
A great fit-out can lift sales, attract better staff and make customers want to come back. We’ll help you split the costs sensibly and find the funding mix that fits your lease and your plan.
Enquiring costs nothing and involves no credit check. We don’t pass your details around to a stack of lenders, and the person reading your enquiry will call you. Please share accurate quotes, lease details and trading figures so we can structure it properly the first time. See if you qualify.
Frequently asked questions
Can a fit-out be used as security for a loan?
Only partly. Removable items such as ovens, coffee machines and computers can secure equipment finance. Fixed building works — walls, plumbing, flooring — have little value to a lender once installed, so they're usually funded with an unsecured or property-secured loan.
Do I need a signed lease before getting fit-out finance?
Usually, yes. Lenders want to know the business has secure tenure for long enough to benefit from the fit-out. Some will consider an agreement for lease or a heads of agreement during negotiations.
Will my landlord contribute to the fit-out?
Sometimes. Landlords may offer a fit-out contribution or rent-free period, especially for new leases. It's worth negotiating before you sign and before you size your finance.
Can a new business get fit-out finance?
Yes, commonly through property-backed lending, equipment finance for removable items, or franchise-backed funding. Unsecured fit-out loans generally need some trading history.