What is fit out finance?
Fit out finance is a type of business loan used for refurbishment, relocation, and redevelopment of businesses in Australia. Fit out loans are used by a variety of businesses to finance everything from electrical work to signage, furniture, and HVAC systems.
Fit out finance can be used for almost any business refurbishment, and is utilised by a wide range of businesses and franchises in Australia, for example:
- Shop fit outs
- Restaurant fit outs
- New office fit outs
- Warehouse and factory fit outs
- Medical practice fit outs
It can finance both major and minor refurbishments. It's commonly used to completely revitalise existing spaces, rebrand following a change of ownership, or upgrade existing fit outs following periods of significant business growth.
Depending on the type of business, borrowers can access up to 100% of the fit-out cost for their new or existing business or franchise.
If fitting out a new premises involves acquiring new equipment, funding that through business equipment finance could also be an option.
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How does fit out finance work?
- Available from banks, specialist lenders and through finance brokers
- Loan amounts up to $1 million
- Terms from 1 month to 5 years
- Finance can be secured of unsecured
- Application process will depend on the lender and loan amount
- You may need to provide the lender with a business plan to support your application
Fit out finance for different business types
Shop fit out finance
Shop fit out finance provides funds you need to completely refurbish and set up your new shop or retail store. This can include display cabinets, clothing racks, front-of-house and sales counters, changing rooms, and much more.
You can use shop fit out finance to purchase:
- Clothing racks and displays
- Display cabinets
- Internal walls and doors for changing rooms
- EFTPOS machines and facilities
- HVAC (heating, ventilation and air-conditioning) units
- Sales and front-of-house counters
- Tiling, carpet, or other flooring
- Lighting, electrical work and fittings
- Furniture such as couches, chairs and tables
- Kitchen equipment for staff areas
- Branded signage and front-of-store signage
- Security systems
Restaurant fit out finance
Restaurant fit out finance can fund everything you need for your new cafe or restaurant. For example, you can use a restaurant fit out loan to purchase kitchen and front-of-house equipment, and even use it to decorate your space with artwork and dining tables.
Restaurant fit out finance allows you to purchase:
- Furniture such as couches, chairs and tables
- Staff benches and counters
- Sales and front-of-house counters
- Lighting, electrical work and fittings
- Kitchen appliances such as dishwashers or fridges
- Kitchen installations such as cabinets and drawers
- Glassware and storage areas
- Toilets and sinks
- Tiling, carpet, or other flooring
- Cold storage rooms
- Branded signage
- Security monitoring systems
- Artwork
- HVAC units
- EFTPOS machines and facilities
Fit out finance for franchises
Fit out finance is commonly used by individuals buying a franchise. Franchise premises commonly require refurbishment every 5 - 10 years. Usually the franchisor does not assist in funding this.
New owners of an existing franchise will often rebrand or purchase new equipment. This means costs for signage, upgraded staff facilities and more. You can read more about this in our guide on purchasing an existing business and franchisee finance.
New office fit out finance
New office fit out finance is ideal for gaining the necessary funding to completely set up your new office space. If you are planning to time your relocation with an update to your business branding, you can use funds to create branded signage, break-out rooms or meeting areas with internal walls.
New office fit out finance can allow you to purchase:
- Employee workstations and desks
- Drawers and cabinets
- Printers and Photocopiers
- Rugs
- Standing desks and whiteboards
- IT infrastructure — including cabling and Wi-Fi extender systems
- Internal walls within an office — including meeting rooms or break-out rooms
- Tiling, carpet, or other flooring
- Lighting, electrical work and fittings
- HVAC units
- Security systems
- Branded signage
- Artwork
- Furniture such as couches, chairs and tables
- Bathrooms — including showers, toilets and washbasins
Fit out finance for medical practices
In Australia, medical professionals are often able to access fit-out finance by using their medical practice as equity — this prevents needing to provide residential property as security.
In general, most medical professionals that meet these criteria will need to be certified by the Australian Health Practitioner Regulation Agency (AHPRA), and can borrow up to 100 per cent of the fit-out costs required.
Medical professionals who may be able to apply using medical practice equity include:
- Doctors
- Dentists
- Physiotherapists
- Veterinarians
While doctors — including GPs and specialists — can meet the approval criteria without a minimum time in practice, all other medical professionals will need to have been in their profession for a minimum of three years.
Lenders will also request that you provide a minimum financial history of one year to approve applications greater than $500,000.
How to qualify and apply for fit out finance
Qualifying for a fit out loan is relatively simple. Most lenders will be able to offer you fit out finance options if you have:
- Been trading for at least 9 months; and
- Have an ABN (Australian Business Number); and
- Are registered for GST
While most lenders will prefer you have been actively trading for a minimum of 9 - 12 months, you can still apply and get approved for fit out finance if you have been trading for less than 9 months.
Fit out finance falls under the same application process as other types of equipment finance. You’ll qualify for fast approval using a streamlined application process if you are applying for finance up to a total value of $100,000 and you:
- Have been in business 24 months; and
- Have an ABN; and
- Are registered for GST; and
- Own a home; and
- Have no major issues in your credit report
If you fall outside the above criteria, or are wishing to apply for a fit out loan greater than $100,000, the application process will be much the same albeit longer and requiring a greater amount of supporting documentation to gain approval.
Documents lenders require for fit out finance
Before applying for fit out finance, you’ll want to research lenders and get a firm understanding of the required documentation. Although some types of documentation will remain consistent between lenders — such as proof of identity — the depth of others may vary.
In general, you will need to supply a range of supporting documents, such as:
- Proof of identity
- Financial records for the previous 2 - 3 years (provided by your accountant)
- Profit and Loss Statements
- Balance Sheet
- Details of your fit out purchases
- Business bank statements
- Rates notice (if you own a home)
- Rental agreement (if you are renting)
Lenders will often request a business plan when assessing fit-out finance loans. This is to illustrate how you expect your business to perform over the next few years (the term of the loan) and how the fit out loan will assist in adding value to your business to increase profits and cash flow.
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