hospitality · Equipment & asset finance
Shop fit-out finance
Most of a fit-out cannot be taken back by a lender, so the assessment is about your business. We prepare it properly so the application stands up.
What is shop fit-out finance?
Shop fit-out finance is funding for the joinery, flooring, lighting, shopfront, signage and services that turn an empty tenancy into a trading business. Because most of a fit-out cannot be repossessed, Australian lenders assess the business, the lease and the operator rather than relying on the works as security.
Fit-out is often the largest single cost of opening a retail, hospitality or clinical business, and it is the hardest to finance because so little of it can be recovered by a lender. Joinery bolted to a wall in a leased tenancy has almost no resale value, which is why fit-out finance is priced closer to unsecured business lending than to equipment finance.
There are two practical ways to improve the outcome. First, negotiate hard with the landlord: a fit-out contribution or an extended rent-free period reduces what you need to borrow at no interest cost. Second, split the project. Ovens, fridges, coffee machines, gym equipment and POS hardware are movable equipment and can usually be financed separately at better rates, leaving a smaller balance to fund as fit-out.
Shop fit-out finance at a glance
| Typical price range | $30,000 – $600,000 |
|---|---|
| Finance term | Up to 60 months |
| Useful life | About 10 years |
| New or used | Fit-outs are new by nature, though taking over an existing fitted tenancy and refreshing it costs far less and is often the smarter commercial decision. |
| Indicative rates (Fit-out finance) | 9.5% – 22% p.a. · rate history |
| Finance structures | Fit-out finance (recommended), Finance lease, Equipment loan |
How lenders assess shop fit-out finance
Fit-out finance is essentially unsecured or lightly secured lending, because joinery and services fixed to a leased tenancy cannot be recovered. Lenders therefore focus on trading history, cash flow, the lease term and the operator’s experience. Terms are usually capped at the remaining lease period, and rarely exceed five years. Free-standing equipment within the project — ovens, fridges, POS, gym gear — can often be split out and financed as equipment at better rates, which lowers the amount needing fit-out treatment.
Before you buy
- Negotiate a fit-out contribution or rent-free period with the landlord before you sign; it is the cheapest money in the project.
- Separate free-standing equipment from fixed works on the builder’s quote so the equipment can be financed more cheaply.
- Make sure your lease term comfortably exceeds the finance term, or you will be paying for a fit-out in premises you no longer occupy.
Commonly financed
Custom joinery and shopfront packages · Commercial LED lighting and track systems · Vinyl, tile and polished concrete flooring · Illuminated and fascia signage · Shelving, display and counter systems
Estimate shop fit-out repayments
- Number of repayments
- 60
- Balloon at end of term
- $63,000
- Total interest (est.)
- $149,423
- Total repaid (est.)
- $464,423
This calculator provides an estimate only and does not account for fees, charges or the specific terms a lender may offer. It is not financial advice or an offer of finance.
Key terms
What is shop fit-out finance?
Shop fit-out finance is funding for the construction, joinery and services needed to make a leased tenancy trade-ready. Because the works cannot generally be repossessed, lenders assess trading history, cash flow and the lease rather than relying on the fit-out as security.
How long can a fit-out loan run?
Terms are usually three to five years and are generally capped at the remaining term of your lease. A lender will rarely fund a fit-out over a period longer than you are committed to occupy the premises.