Fitting out leased premises: funding a tenant fit-out without property

Why is a tenant fit-out tricky to fund?

Because a lot of what you pay for stays with the building. Joinery, partitions, lighting, plumbing and flooring are built into premises you don’t own. A lender can’t easily recover and resell them, and at the end of the lease you may even have to pay to remove them.

That’s why a fit-out works best when you split it into parts that suit different kinds of funding.

How should you split a fit-out?

Fit-out element	Examples	Usual funding
Removable equipment	Coffee machines, ovens, fridges, dental chairs, salon basins, POS	Equipment finance, secured by the item
Movable furniture	Tables, chairs, shelving, display units	Equipment finance or unsecured
Built-in work	Joinery, partitions, electrical, plumbing, flooring	Unsecured loan sized on turnover
Signage and branding	External signs, window graphics	Unsecured loan
Soft costs	Design, permits, certification	Unsecured loan or cash

Putting removable equipment on equipment finance keeps your unsecured capacity for the built-in parts. It often means both parts are easier to approve.

What will a lender ask about your lease?

Fit-outs are tied to premises, so the lease matters more here than for most uses. Expect questions about:

• Remaining term and options. The fit-out should keep earning well after the last repayment.
• Landlord contributions or incentives, which reduce the amount needed.
• Make-good obligations at the end of the lease.
• Landlord consent for works and, for some equipment finance, access to recover financed items.

A five-year lease with options is a comfortable base for a fit-out. An 18-month lease with no option is harder to justify for a large spend. business.gov.au’s guidance on choosing a business location is a useful checklist when you’re negotiating.

If you’re signing a new lease, our guide to the upfront costs of a commercial lease will help you budget for bonds, bank guarantees and fit-out together.

How much should you borrow for a fit-out?

Start with quotes, then add a contingency. Fit-outs often run over, and running out of money halfway is worse than borrowing a little more at the start. Subtract:

• any landlord contribution;
• cash you’ll put in yourself;
• anything going on equipment finance.

What’s left is the unsecured amount. Check it against what your turnover supports with the borrowing estimator, or ask a specialist to look at it with you.

Does the instant asset write-off apply to fit-outs?

The ATO has made the $20,000 threshold ongoing from 1 July 2026 for eligible businesses with aggregated turnover below $10 million. Some removable fit-out items may qualify individually. Built-in improvements are treated differently for tax. Your accountant should confirm what applies. Our equipment and write-off guide covers the planning side.

How do you time a fit-out around funding?

1. Get quotes and a realistic timeline from your builder.
2. Confirm landlord consent and any contribution in writing.
3. Arrange funding before works start. Don’t commit the builder without it.
4. Plan for the trading gap. If you’re closed during works, you’ll need cash for rent and wages with no income.
5. Keep a contingency for overruns.

Staging can help. Fund the essential first stage, reopen, build a few months of stronger statements, then fund the rest.

A worked example (illustrative)

A dental practice leasing a suite wants to add two surgeries. Quotes total about $210,000: $120,000 for chairs, imaging and sterilisation equipment, and $90,000 for partitions, plumbing, electrical and joinery. The landlord offers a small contribution. The lease has six years left with options.

Equipment finance for the $120,000 of clinical equipment, plus an unsecured loan for the built-in work after the landlord contribution, would suit this. The long lease supports both. The figures are illustrative.

What do lenders need to see for a fit-out?

A fit-out application is easier to approve when the paperwork answers the obvious questions before they’re asked. Pull together:

• Itemised quotes from your builder and suppliers, separating removable equipment from built-in work.
• The lease, or at least a summary showing the term, options, rent and any landlord contribution.
• Landlord consent for the works, in writing.
• Six to twelve months of business bank statements showing current turnover.
• A simple timeline: when works start, how long you’ll be closed (if at all), and when you expect to reopen.
• Your reasoning: more covers, more treatment rooms, a better location, higher prices. A sentence or two is enough.

For an existing business relocating or expanding, lenders focus on current trading and how the new space lifts it. For a brand-new venture, they look harder at the owner’s experience and any cash being contributed. Either way, a clear pack shortens the time between enquiry and a decision, and reduces the chance of being offered less than the job needs.

Keep copies of everything. You’ll want them again at tax time and if you ever refinance.

Make the space work without owning it

You don’t need to own the building to build a better business inside it. Tell us about the fit-out and your lease. Enquiring won’t touch your credit file, we don’t circulate your details among a cluster of lenders, and a real person will help you split the costs sensibly.

Please include accurate quotes, lease term and turnover on the form. That’s how we get the match right first time. See what you qualify for.