The short answer
Business fit out finance is usually split in two. Moveable items such as ovens, coolrooms, chairs, salon stations and computers suit equipment finance, because the asset itself is the security. Fixed works such as joinery, electrical, plumbing and flooring have little resale value, so they are funded by a term loan from a bank or non-bank lender, a property-secured loan, or a landlord contribution. The lease term matters to every lender.
On this page · 11 sections
- Why do lenders split a fit-out in two?
- Which lenders fund business fit-outs?
- How does the lease affect a fit-out loan?
- What does fit-out finance look like on a real project?
- How do you apply for fit-out finance?
- What do lenders want to see for a fit-out?
- What about tax and the instant asset write-off?
- How do fit-outs differ from one industry to the next?
- Can you refinance a fit-out later?
- What are the common mistakes with fit-out finance?
- Ready to plan your fit-out finance?
Key points
- Separate the quote into moveable equipment and fixed building works before you approach a lender.
- Equipment finance funds the moveable items; term loans or property-secured loans fund the rest.
- Lenders want your lease to run longer than the loan.
- Ask the landlord about a fit-out contribution or rent-free period first.
Key facts
- Main lender types
- Asset financiers, banks, non-banks, property-backed lenders
- Security
- The equipment, a director guarantee, sometimes property
- Typical documents
- Itemised quotes, the lease, bank statements, BAS, financials
- Suits
- Cafés, clinics, salons, gyms, shops, offices
- Timing
- Allow for staged payments to the fit-out contractor
Business fit out finance is borrowing to turn an empty or tired premises into one you can trade from: the joinery, lighting, flooring, plumbing and electrical work, plus the equipment that goes into it. It is one of the few purposes where a single project nearly always needs two kinds of lender, because a fit-out is part moveable equipment and part permanent building work, and lenders treat those two halves very differently.
Why do lenders split a fit-out in two?
Because only one half has resale value. A combi oven, a coolroom, a dental chair or a set of salon stations can be repossessed and sold if the loan goes bad, so an asset financier can lend against the item itself. Custom joinery, a new ceiling, wiring and a polished concrete floor cannot be removed from a building and sold. In a leased premises they effectively stay with the landlord’s property.
So the first job is to ask your fit-out contractor for an itemised quote with two columns:
- Moveable equipment: kitchen gear, refrigeration, furniture, shelving that is not built in, computers, point-of-sale systems, gym machines, medical and beauty equipment.
- Fixed works: design, demolition, partitions, joinery, electrical, plumbing, air conditioning ducting, flooring, signage installation and certification.
With that split, you can send each half to the lender type built for it.
Which lenders fund business fit-outs?
| Part of the fit-out | Best-placed lender | Finance product | Backed by |
|---|---|---|---|
| Moveable equipment | Asset and equipment financiers | Equipment finance or chattel mortgage | The equipment plus a guarantee |
| Fixed works, established business | Major or regional banks | Term loan | Financials, guarantee, often property |
| Fixed works, newer or lightly documented business | Non-bank lenders | Term loan or secured business loan | Guarantee, property where available |
| Smaller refresh of an existing site | Online lenders | Unsecured loan | Bank statements and turnover |
| Whole project, owner has equity | Non-banks, private lenders | Property-secured loan | Residential or commercial property |
| Contribution toward works | Your landlord | Fit-out contribution or rent-free period | Lease commitment |
Property security changes the picture. An owner with equity in a home or commercial property can often fund the whole fit-out in one property-secured loan between $20,000 and $5,000,000, which avoids juggling two lenders. Without property, the split structure is normal.
How does the lease affect a fit-out loan?
Every lender funding a fit-out in rented premises reads the lease. They look for:
- Remaining term and options. The lease should outlast the loan. A five-year loan against a lease with eighteen months left will struggle.
- Make-good clauses. If you must strip the fit-out at the end, the lender factors that in.
- Landlord consent to the works, and sometimes a landlord’s waiver letting an asset financier collect its equipment if needed.
- Rent and outgoings, which come out of the same cash flow as the loan repayments.
Negotiate the lease and the finance at the same time. A longer term or an extra option can be the difference between a straightforward approval and a decline.
Planning a fit-out now? See which lenders would fund your premises before you sign the builder’s contract.
What does fit-out finance look like on a real project?
Take a hypothetical case, illustrative only and with simplified figures. A café operator takes a new seven-year lease on an empty shop. The fit-out quote is $180,000, split as $70,000 of kitchen equipment, refrigeration and furniture, and $110,000 of design, joinery, electrical, plumbing and flooring. The landlord contributes $20,000 toward the works. An equipment financier funds the $70,000 of equipment over five years against the items. A non-bank lender funds $70,000 of the fixed works over five years with a director guarantee, and the owner contributes $20,000 cash. The owner adds a modest buffer for variations, so the opening date does not depend on everything going perfectly.
How do you apply for fit-out finance?
- Get an itemised quote split into moveable equipment and fixed works, with a payment schedule.
- Settle the lease or at least agree the heads of terms, including any landlord contribution.
- Check your own position: bank statements, BAS, financials if you have them, and any property you could offer.
- Approach the equipment side and the fixed-works side with the right lender types, or ask a specialist to coordinate both.
- Line up payment timing. Fit-out contractors usually invoice in stages, so make sure the lender can pay progress claims, not just one lump sum.
- Keep a contingency for variations, certification and delays.
What do lenders want to see for a fit-out?
| Document | Why it matters |
|---|---|
| Itemised fit-out quote | Shows what is equipment and what is fixed works |
| Signed lease or agreement for lease | Confirms the term outlasts the loan |
| Bank statements and BAS | Show the business can carry the repayments |
| Financial statements | Banks usually want two years for larger amounts |
| A short trading plan | Essential for a new site or a new business |
| Existing debts and PPSR registrations | Lenders check what is already secured |
For a brand-new business with no trading history, the fit-out is harder to fund without property security. Our page on business loans for a new ABN explains which lenders work with young businesses.
What about tax and the instant asset write-off?
Fit-outs often include assets that qualify for the ATO’s $20,000 instant asset write-off. The ATO confirms the threshold is permanent from 1 July 2026 for businesses with aggregated turnover under $10 million, applies per asset, and requires the asset to be first used or installed ready for use in the income year. Which parts of a fit-out count as depreciating assets, and which are treated as building works, is a question for your accountant. Getting the quote split early helps them and the lender at the same time.
How do fit-outs differ from one industry to the next?
The equipment-to-works ratio changes a lot by trade, and so does the lender mix:
| Business | Typical equipment share | What lenders focus on |
|---|---|---|
| Café or restaurant | High: kitchen, refrigeration, furniture | Lease term, kitchen exhaust and grease trap works, licensing |
| Medical or dental clinic | High: chairs, imaging, sterilisation | Practitioner registration, patient demand, lease security |
| Hair or beauty salon | Medium: stations, basins, treatment beds | Plumbing works, owner experience, takings |
| Gym or fitness studio | High: machines and weights | Membership numbers, lease term, flooring and acoustic works |
| Retail shop | Low to medium: shelving, counters, point of sale | Foot traffic, stock funding alongside the fit-out |
| Office | Low: furniture and IT | Mostly fixed works, so security or financials carry the deal |
The more of the budget that sits in equipment, the more of it an asset financier can carry, and the less you need from an unsecured or property-secured lender. An office fit-out is the hardest to fund without property, because nearly all of it is fixed works.
Can you refinance a fit-out later?
Sometimes. Owners who paid for a fit-out from cash, credit cards or a short-term loan to hit an opening date can often refinance onto a longer term once the business has a few months of trading. Equipment bought outright may be refinanced through a sale-and-leaseback or a chattel mortgage, and fixed works can be rolled into a longer secured loan if property is available. Our page on refinancing business debt explains when that is worth doing.
What are the common mistakes with fit-out finance?
- Signing the builder before the finance is approved. You may be locked into payments you cannot yet make.
- Borrowing for the fit-out but not for opening. Stock, wages and marketing for the first months need funding too. See working capital loans.
- Ignoring the lease term. It is the first thing many lenders check.
- No contingency. Variations are common, especially in older buildings.
Industry pages such as hospitality and hair and beauty show how fit-outs fit into each trade’s finance mix, and the funding-for hub lists every other purpose we cover.
Ready to plan your fit-out finance?
Send us the fit-out budget, the lease details and a little about the business, and a lending specialist will tell you how to split the project across the right lenders. See if your fit-out qualifies in about a minute. There is no credit check just to ask, your details go to a suitable lender only with your say-so rather than out to a list, and a real person handles the file. Give us accurate figures and we can line up the right structure the first time.
Frequently asked questions
Can I get finance for a fit-out on a leased premises?
Yes, it is the most common case. The catch is that fixed works in a leased building effectively belong to the landlord's premises, so a lender cannot repossess and sell them. That is why lenders fund leased fit-outs through equipment finance for moveable items and a term loan, guarantee or property security for the fixed works, and why they check the lease term closely.
Does equipment finance cover the whole fit-out?
Usually not. Asset financiers fund items with a resale market, such as commercial kitchen equipment, refrigeration, furniture, dental chairs or IT. Joinery, partitions, ceilings, electrical and plumbing work generally fall outside equipment finance. Some specialist financiers will include a portion of soft costs alongside the equipment, but expect to fund most fixed works another way.
How long a lease do lenders want for a fit-out loan?
Most lenders want the remaining lease, including any options you can realistically exercise, to run beyond the end of the loan. A five-year loan on a lease with two years left raises the obvious question of what happens if the landlord does not renew. Sort out the lease before you finalise the finance, not after.
Can I claim the fit-out under the instant asset write-off?
Possibly part of it. The ATO's $20,000 instant asset write-off, permanent from 1 July 2026 for businesses with aggregated turnover under $10 million, applies per depreciating asset first used or installed ready for use in the income year. Fixed building works may be treated differently, so ask your accountant to sort the quote into categories before you buy.
Should I use my landlord's fit-out contribution?
If one is on offer, it is usually the cheapest money in the project. Landlords sometimes contribute to fit-out costs or offer rent-free months, particularly for longer leases or vacant premises. Read the make-good and repayment terms carefully, and tell your lender about the contribution, because it reduces how much you need to borrow.
What if the fit-out goes over budget?
Build a contingency into the amount you ask for, typically by getting firm quotes and adding a buffer for variations. Going back to a lender mid-project for more money is harder than borrowing the right amount at the start, and a half-finished fit-out cannot open and trade. A line of credit alongside the main loan can absorb small overruns.
Sources we checked
- ATO — $20,000 instant asset write-off
- business.gov.au — Choose your funding
- AFSA — Personal Property Securities Register
General information only, current at 5 October 2026. We don't publish interest rates: every business loan is priced on the borrower's own circumstances.
