Fit-Out Loans Australia

A commercial fitout is one of the largest single capital expenditures a small or medium-sized business will ever make. It is also one of the most financially complex, because it combines a construction project, a lease negotiation, a tax decision, and an equipment purchase into a single transaction that most business owners undertake once or twice in the life of their business. A cafe fitout in Melbourne might cost $300,000 to $500,000. A dental practice fitout including clinical equipment is $400,000 to $800,000. A mid-size law firm office fitout across 300 square metres in a Sydney CBD building is $400,000 to $700,000. A beauty salon fitout in a suburban strip is $80,000 to $200,000. In all cases, the business must fund a large upfront cost that will be spread across years of lease term before the investment pays back through business revenue.

Australian Finance & Loans is an independent finance broker with access to over 50 lenders. We arrange fitout finance across all commercial premises types and all business sectors. This page explains fitout finance with a depth and honesty that no other Australian fitout loan page offers. It covers: what fitouts actually cost by sector in current 2025 AUD per square metre figures; the tax treatment of fitout expenditure and why the Division 40 versus Division 43 distinction matters to your finance decision; how landlord fitout contributions interact with your loan and what the clawback provision means; why your loan term should never exceed your remaining lease term; the make-good obligation that almost every business misses when planning their fitout budget; and the specific finance structures available for fitout projects from unsecured business loans through to asset-backed fitout facilities.

What a Commercial Fitout Actually Costs in Australia (2025)

One of the most common frustrations for business owners planning a fitout is the difficulty of getting realistic cost estimates before engaging a fitout contractor. The following cost-per-square-metre benchmarks are based on 2025 Australian market conditions and provide a starting point for budget planning. Actual costs vary with location, specification level, structural complexity, services requirements and market conditions at time of tender.

Office Fitouts

• Basic office fitout (open plan, painted walls, carpet, basic lighting, standard joinery): $800 to $1,400 per sqm

• Mid-range office fitout (mix of open plan and meeting rooms, quality joinery, feature lighting, end-of-trip facilities): $1,400 to $2,200 per sqm

• Premium office fitout (boardrooms, custom joinery, high-end finishes, full AV integration, building services upgrade): $2,200 to $4,000+ per sqm

• Example: 150 sqm mid-range professional services office in Melbourne CBD: $210,000 to $330,000 total

• Example: 300 sqm premium corporate office in Sydney CBD: $660,000 to $1,200,000 total

Retail Fitouts

• Basic retail fitout (painted walls, polished concrete, basic shelving and lighting): $800 to $1,500 per sqm

• Mid-range branded retail (custom joinery, feature displays, premium flooring, signage and lighting design): $1,500 to $3,000 per sqm

• Premium boutique or luxury retail (full custom, high-end materials, architectural lighting, climate control): $3,000 to $5,000+ per sqm

• Example: 80 sqm mid-range fashion boutique: $120,000 to $240,000

• Example: 200 sqm food and grocery specialty retailer: $300,000 to $600,000

Hospitality Fitouts (Cafes, Restaurants, Bars)

• Simple cafe fitout with basic kitchen (existing services, minimal structural work): $1,500 to $2,500 per sqm

• Full cafe or restaurant fitout with commercial kitchen (new services, custom joinery, exhaust and ventilation): $2,500 to $5,000 per sqm

• Premium bar or restaurant (feature fitout, specialist kitchen, full HVAC, custom joinery throughout): $5,000 to $8,000+ per sqm

• Commercial kitchen equipment alone: $40,000 to $200,000 depending on menu and covers capacity

• Example: 80 sqm inner-city cafe with full commercial kitchen: $200,000 to $400,000 all-in

• Example: 200 sqm full-service restaurant: $500,000 to $1,200,000 all-in

• Note: hospitality fitouts are the highest cost per sqm of any commercial fitout category due to commercial kitchen, ventilation, grease trap, plumbing, fire suppression and food safety compliance requirements

Medical and Dental Fitouts

• GP medical practice fitout (consulting rooms, waiting area, reception, basic procedure room): $2,000 to $4,000 per sqm for construction; clinical equipment is additional

• Dental practice fitout (operatories, sterilisation, OPG room, reception, waiting): $3,000 to $6,000 per sqm for construction; dental chairs and equipment add $25,000 to $60,000 per operatory

• Allied health fitout (physiotherapy, psychology, chiropractic): $1,500 to $3,000 per sqm

• Specialist medical or surgical fitout (procedure theatre, sterile fields, specific HVAC and plumbing): $4,000 to $10,000+ per sqm

• Example: 4-chair dental practice, 150 sqm: $300,000 to $500,000 construction plus $100,000 to $240,000 in chairs, OPG and equipment = $400,000 to $740,000 all-in

Beauty, Wellness and Personal Services

• Hair salon fitout (wash basins, stations, reception, product displays): $1,500 to $3,000 per sqm

• Beauty salon or day spa (treatment rooms, ambience lighting, plumbing, custom joinery): $2,500 to $5,000 per sqm

• Nail bar fitout (stations, ventilation, lighting): $1,500 to $3,000 per sqm

• Tattoo or piercing studio: $1,500 to $3,000 per sqm with sterile room requirements

• Example: 60 sqm hair and beauty salon: $90,000 to $180,000

Fitness and Wellness

• Gym and fitness centre fitout (flooring, mirrors, equipment storage, bathrooms): $800 to $1,500 per sqm for the space; gym equipment is additional and substantial

• Yoga or pilates studio (sprung flooring, mirrors, changing rooms, reception): $1,000 to $2,000 per sqm

• Boxing or martial arts gym: $800 to $1,500 per sqm plus ring or mat equipment

• Example: 200 sqm boutique gym fitout: $160,000 to $300,000 plus $50,000 to $150,000 in equipment

Childcare and Education

• Early learning centre or childcare fitout (compliant nappy change, sleep areas, kitchen, outdoor play fencing, activity zones): $2,500 to $5,000 per sqm due to regulatory compliance requirements

• Tutoring or educational centre (classrooms, breakout areas, reception): $1,000 to $2,000 per sqm

Professional Services (Accountants, Lawyers, Financial Advisers, Recruiters)

• Standard professional office: $1,000 to $2,000 per sqm

• Premium branded professional services fitout: $2,000 to $3,500 per sqm

Landlord Fitout Contributions: The Free Money Most Tenants Leave on the Table

A landlord fitout contribution is a payment by the landlord towards the cost of the tenant's fitout works. It is one of the most commonly available and most frequently underutilised sources of fitout funding available to Australian businesses. In competitive commercial leasing markets, particularly in CBD office towers and large shopping centres with higher vacancy rates, landlords routinely offer fitout contributions of $500 to $1,500 per square metre on new leases of 3 years and above. On a 200 sqm office, a $1,000 per sqm landlord contribution represents $200,000 in funding that costs the tenant nothing.

Why landlords offer fitout contributions

Landlords offer fitout contributions to attract high-quality long-term tenants in competitive markets. A vacant tenancy costs the landlord in lost rent. Offering a contribution to secure a creditworthy tenant on a 5-year lease is economically rational for the landlord even at significant cost. In markets where tenant vacancy rates are high, contributions are larger. In tight markets with low vacancy, contributions shrink. The contribution level is negotiable and a business owner who does not ask leaves money on the table.

How landlord contributions are typically structured

• Reimbursement basis: the tenant completes the fitout and submits tax invoices; the landlord reimburses up to the agreed contribution amount. The contribution is paid after the work is done, which means the tenant still needs cash or finance to complete the fitout upfront

• Landlord does the works: the landlord contracts and manages the base fitout up to the contribution value; the tenant funds any additional works above that level

• Rent-free period: instead of a cash contribution, the landlord provides rent-free months at lease commencement, allowing the tenant to redirect rent savings to the fitout. A 3-month rent-free period on $6,000 per month rent is worth $18,000

• Combined: many landlords offer a combination, such as a cash contribution plus a 2-month rent-free period

The clawback provision: what it means for your finance

Almost all landlord fitout contribution agreements contain a clawback provision. If the tenant exits the lease early, either by surrendering the lease, assigning it or through a breach, the landlord can reclaim all or a proportion of the fitout contribution, typically calculated on a pro-rata basis over the lease term. For example, if a tenant receives a $150,000 contribution on a 5-year lease and exits after 2 years, the landlord may claw back $90,000 (60% of the term remaining). This clawback liability is a real financial exposure that must be factored into the business's planning. If the business needs finance to fund the gap between the landlord contribution and the total fitout cost, the clawback liability is relevant because it affects what happens to the finances if the lease is terminated early.

The tax treatment of landlord contributions: what your accountant needs to know

The tax treatment of a landlord fitout contribution depends on the lease agreement. Where the lease specifies that the tenant owns the fitout, the ATO typically treats the landlord contribution as assessable income to the tenant in the year it is received. The tenant can then claim depreciation on the full fitout cost including the contributed amount. Where the lease specifies that the landlord owns the fitout up to the value contributed, the tenant receives no income and cannot claim depreciation on the contributed portion. These two treatments have materially different tax outcomes. Always confirm the ownership and tax treatment of the contribution with your accountant before signing the lease or fitout contribution deed.

Financing the gap between the landlord contribution and total fitout cost

Most landlord contributions cover part of the fitout cost, not all of it. A business with a $300,000 fitout and a $100,000 landlord contribution still needs to fund $200,000. The fitout loan funds this gap. Because the landlord contribution is paid on reimbursement after the work is done, and the tenant typically needs to pay the fitout contractor during construction, the tenant often needs the full $300,000 in funding at outset, with the $100,000 landlord reimbursement received after completion and applied to reduce the outstanding loan. We structure fitout loans to accommodate this timing and the landlord contribution reimbursement.

The Lease Term Rule: Why Your Fitout Loan Must Never Exceed Your Remaining Lease

This is a rule that almost no other Australian fitout finance page states clearly, but it is one of the most important structural principles in fitout lending. A fitout loan should never be structured over a term longer than the remaining term of the lease over the fitted-out premises.

Why this matters

A fitout has no standalone value when the lease over the premises ends. Custom joinery built for a specific tenancy layout, plumbing installed for a specific use, and decorative finishes tied to a specific design concept do not move with the business. If the lease ends and is not renewed, the fitout is left behind or demolished under make-good obligations. A business that has a 5-year fitout loan but only 3 years remaining on the lease faces a situation where the loan balance significantly exceeds the value of the remaining fitout at lease end. If the lease is not renewed, the business owes the balance of the loan on an asset it can no longer use.

The matching principle in practice

• 5-year lease, day-one fitout loan: loan term of up to 5 years is appropriate

• 5-year lease with 2 years already expired, refurbishment fitout: loan term of up to 3 years is appropriate

• 3-year lease option in a 5-year lease: loan term up to 5 years is acceptable where the lease option is genuine and the business intends to exercise it; lenders may require confirmation of intention

• Month-to-month or holdover lease: fitout loans are generally not appropriate; secure a new lease term before financing a significant fitout

The option period consideration

Many commercial leases include option periods: the right to renew the lease for a further term at the tenant's election. A 5-year lease with a 5-year option may support a fitout loan of up to 7 to 10 years in some lender assessments, particularly where the premises is well-established and the option is likely to be exercised. Lenders assess this on a case-by-case basis and in many cases require a confirmed intention to exercise the option or evidence of the business's track record at the same premises. We advise on how your lease option structure affects the available loan term.

Make-Good Obligations: The Fitout Cost Most Businesses Forget

Make-good is the obligation to return a leased premises to its original condition at the end of the lease. It is specified in the lease agreement and is one of the most commonly overlooked financial obligations in commercial tenancy. Most businesses plan their fitout budget carefully but do not budget for the make-good cost at lease end, which can be a substantial sum.

What make-good typically requires

• Removal of all non-structural fitout including joinery, partitioning, shelving, fit-out flooring, signage and decorative elements

• Patching and repainting walls to the landlord's standard

• Removal of specialised services including additional plumbing points, exhaust ductwork added for hospitality or beauty uses, and electrical sub-boards

• Removal of signage and repair of any façade penetrations

• In some cases, restoration of mechanical services to original configuration

What make-good costs

The cost of make-good depends on the extent of the fitout and the condition of the premises at lease entry. A basic office fitout make-good for 200 sqm typically costs $20,000 to $60,000. A hospitality fitout make-good that requires removal of a commercial kitchen, grease trap, exhaust systems and specialised plumbing typically costs $50,000 to $150,000. A dental fitout make-good removing operatory plumbing, suction systems, OPG room lead lining and cabinetry typically costs $40,000 to $100,000.

Planning for make-good in your finance strategy

The make-good obligation is not funded by the fitout loan because it occurs at the end of the lease, potentially years after the loan is repaid. However, it needs to be in the business's financial planning from the start of the lease. Some businesses set aside a make-good reserve from day one. Others negotiate reduced or limited make-good obligations in the lease agreement before signing: the lease negotiation is the best and only time to limit make-good exposure. A landlord who has offered a fitout contribution may agree to waive or reduce the make-good requirement in return. Once the lease is signed, the make-good obligation is fixed. We mention this on this page because many businesses come to us for fitout finance without having planned for the make-good cost at lease end.

Division 40 and Division 43: The Tax Treatment of Fitout Expenditure

The ATO tax treatment of commercial fitout expenditure is more complex than most business owners realise, and no other Australian fitout finance page explains it clearly. A commercial fitout contains two distinct categories of expenditure from the ATO's perspective: Division 40 assets (plant and equipment) and Division 43 works (capital works or building allowance). These categories have completely different depreciation rates and interact differently with the instant asset write-off.

Division 40: Plant and Equipment

Division 40 assets are the removable or separately identifiable items within the fitout: light fittings, carpet, blinds, joinery, countertops, commercial kitchen equipment, dental chairs, POS systems, fit-out furniture, display shelving and similar items. These are depreciated at their individual ATO effective life rates, which vary by asset type. The advantage of Div 40 treatment is faster depreciation: a commercial kitchen appliance with a 5-year effective life is fully depreciated in 5 years. Division 40 assets may also be eligible for the instant asset write-off for eligible small businesses in eligible years, allowing immediate full deduction in the year of purchase. This is a significant tax benefit that applies to the equipment and fit-out components of a fitout but not to the structural works.

Division 43: Capital Works (Building Allowance)

Division 43 covers the structural and construction elements of the fitout: walls, ceilings, flooring (as a structural element), internal partitioning, plumbing that is part of the building structure, and general construction work. Division 43 capital works are depreciated at a flat rate of 2.5% per year over 40 years. This is dramatically slower than Div 40 depreciation. A $100,000 structural fitout element claimed under Div 43 generates $2,500 in tax deductions per year for 40 years, not an immediate write-off. Div 43 is not eligible for the instant asset write-off.

Why this matters for your finance decision

Understanding the Div 40 versus Div 43 split in your fitout budget helps you and your accountant structure the deductibility of your fitout expenditure. A fitout quote that breaks out equipment, joinery and loose furnishings from structural construction work allows your accountant to maximise Div 40 claims (including potential IAWO) on the identifiable plant and equipment components. A lump-sum fitout contract with no line-item detail makes this allocation difficult. We recommend requesting an itemised fitout contract from your fitout contractor and having your accountant review the Div 40 versus Div 43 allocation before you commit to the finance structure. Always confirm the tax treatment of your specific fitout with your accountant: tax rules change and individual circumstances vary.

Finance Structures for Fitout Projects

Unsecured Business Loan

An unsecured business loan is the most commonly used fitout finance product for amounts up to $250,000 to $300,000. It is a lump-sum facility drawn at settlement, repaid over a fixed term in regular instalments. No property or equipment security is required. For established businesses with a trading history of 1 to 2 years and a clean credit profile, unsecured fitout loans are approved within 24 to 48 hours through specialist non-bank lenders on our panel. The interest cost is higher than secured lending but the speed, simplicity and absence of security encumbrance make it the preferred structure for most small business fitout projects. Rates range from approximately 9.99% to 24.99% per annum from non-bank lenders depending on the business's credit profile and trading history.

Secured Business Loan (Property-Backed)

Businesses that own residential or commercial property can access a secured fitout loan at materially lower interest rates than unsecured lending. A secured fitout loan uses the owned property as additional security, reducing the lender's risk and enabling rates from approximately 6.50% to 10% per annum for well-qualified borrowers. Larger amounts are also available: a property-backed fitout facility of $500,000 to $1,500,000 is accessible for businesses with adequate equity in residential or commercial property. The trade-off is that the property secures the loan and is at risk in the event of default.

Equipment Finance (Chattel Mortgage for Identifiable Fitout Items)

The Division 40 items within a fitout, such as commercial kitchen equipment, dental chairs, gym equipment, POS systems, AV systems, joinery and loose furniture, can in many cases be financed as individual equipment assets under a chattel mortgage. This approach provides the GST input tax credit on the equipment purchase, tax-deductible interest and depreciation claims, and potentially the instant asset write-off for eligible items and businesses. Equipment finance requires an itemised invoice identifying the specific items being financed. It is the most tax-efficient structure for the identifiable plant and equipment components of a fitout. We often recommend a hybrid structure: equipment finance for the identifiable Div 40 items and an unsecured business loan for the Div 43 construction works.

Low-Doc Business Loan

For established businesses that cannot easily provide full financial statements, 3 to 6 months of business bank statements and BAS returns are accepted by low-doc lenders on our panel for fitout loans up to $150,000 to $250,000. This is appropriate for sole trader-operated businesses, businesses in their second or third year of operation with up-to-date accounts not yet completed, and businesses with naturally variable income where recent statements do not reflect the current trading position.

Line of Credit / Revolving Facility

A revolving business line of credit is useful where the fitout project involves staged payments over several months, as is typical for larger fitout projects with progress claims. Rather than drawing the full loan at settlement, the business draws against the line as fitout invoices are presented. This reduces interest cost by only drawing funds when they are actually needed. Lines of credit are available unsecured from $20,000 to $250,000 for established businesses, and secured by property from $100,000 to $1,000,000.

Fitout Finance by Sector: Specific Considerations

Hospitality: Cafes, Restaurants and Bars

Hospitality fitouts carry the highest cost per square metre and the highest financial complexity of any commercial fitout category. A commercial kitchen specification alone requires a qualified kitchen designer and involves grease trap installation, commercial gas supply, exhaust canopy and make-up air systems, commercial cooking equipment, commercial refrigeration, dishwasher and washup areas, and food safety compliance elements. The fitout finance for a hospitality venue must cover the construction works, all commercial kitchen equipment, front-of-house furniture and fixtures, POS and ordering systems, and AV and music systems.

For a new hospitality venue, lenders require evidence of the business operator's experience in the sector. A first-time hospitality operator without industry experience faces higher rates and may require personal property security. An experienced operator with documented trading history at a previous venue and a signed commercial lease is assessed more favourably.

Medical and Dental Practices

Medical and dental fitout finance has unique characteristics. The clinical equipment is major capital expenditure: a dental practice chair unit from A-dec, Planmeca or Sirona costs $25,000 to $50,000 per operatory; an OPG panoramic X-ray unit costs $25,000 to $40,000; a CBCT cone beam CT scanner costs $60,000 to $150,000. These are financed as specialist medical equipment under a chattel mortgage or finance lease, separately from or alongside the fitout construction. A new dental practice establishment is one of the largest small business capital investments made in Australia, typically totalling $400,000 to $800,000 all-in including fitout, equipment and working capital.

Retail

Retail fitout finance is typically more straightforward than hospitality or medical. The primary capital items are joinery (display shelving, counters, fitting rooms), POS systems, lighting and floor finishes. For franchise retail businesses, the fitout specifications are often mandated by the franchisor, with limited flexibility on materials or suppliers. Franchise fitouts typically require an independent quote from the franchisor-approved fitout contractor and may need to meet specific brand standards before finance approval. We have experience in franchise fitout finance across multiple Australian retail franchise networks.

Office Fitouts for Professional Services

Professional services offices (law firms, accounting firms, recruitment agencies, financial planners) require reliable and fast fitout finance because their lease commitment is typically signed months before fit-out commencement and the business has often already given notice at the previous premises. The time pressure means approval speed is important. Office fitouts are also well-understood by lenders as a security type because they contain identifiable equipment (AV systems, server rooms, workstations) and their cost is predictable from the builder's quote. We regularly arrange office fitout finance within 48 hours for established professional services businesses.

Beauty Salons, Barbers and Nail Bars

Beauty and personal services fitouts are a common and recurring fitout finance category. The capital investment for a fully-equipped hair salon of 80 to 120 sqm including custom cabinetry, wash basins, stations and reception is typically $100,000 to $200,000. For a day spa with treatment rooms, custom joinery, specialty lighting and enhanced plumbing, $150,000 to $350,000. Low-doc fitout finance assessed on bank statements is the most common pathway for first-time salon operators, with approval possible within 24 to 48 hours for operators with relevant experience.

Gyms and Fitness Studios

Gym and fitness fitout finance is unique because the fitout construction cost is typically modest (the space itself requires relatively simple floor finishes, mirrors and dividing walls) but the equipment cost is substantial. Cardio and strength equipment for a 300 sqm commercial gym from Life Fitness, Technogym, Precor or Matrix costs $80,000 to $250,000. The fitout loan funds the construction; equipment finance funds the machines. We regularly structure split facilities for gym operators covering both the fitout and the gym equipment.

Childcare Centres

Childcare fitout finance involves one of the most regulation-heavy fitout environments in Australian commercial tenancy. Children's services regulations specify minimum floor area per child, nappy change and bathroom requirements, sleep room requirements, outdoor play area fencing, and food preparation facilities. Compliance costs add substantially to the base fitout cost. A 60-place long day care centre fitout can cost $800,000 to $1,500,000 for the premises, before fit-out furniture, equipment and resources. Childcare fitout finance for established operators requires the ACECQA or state regulatory approval confirmation. We work with childcare operators across all states.

Fit-Out Loan Details

Loan Amounts

Unsecured fitout loans from $20,000 to $300,000 without property security. Property-secured fitout loans from $100,000 to $1,500,000 with adequate equity. Equipment finance for identifiable fitout assets from $5,000. For large hospitality, medical or childcare fitouts above $500,000, a combination of secured loan and equipment finance is often the most practical structure.

Loan Terms

Unsecured fitout loans: 1 to 5 years. Property-secured loans: 1 to 10 years. Equipment finance for fitout items: 1 to 5 years. The overriding rule: no loan term should exceed the remaining term of the lease over the fitted-out premises. A 3-year lease should not support a 5-year fitout loan.

Interest Rates

Unsecured non-bank fitout loans: approximately 9.99% to 24.99% per annum depending on credit profile and trading history. Property-secured fitout loans: approximately 6.50% to 10% per annum. Equipment finance for fitout items under chattel mortgage: approximately 7.50% to 12% per annum. All rates are individually assessed.

Approval Speed

Unsecured fitout loans up to $150,000 for established businesses with clean credit: 24 to 48 hours. Loans above $150,000 or low-doc applications: 48 to 72 hours. Property-secured loans: 5 to 10 business days for valuation and settlement. Equipment finance for identifiable fitout items: 24 to 48 hours.

Frequently Asked Questions About Fit-Out Loans in Australia

How much does a commercial fitout cost in Australia?

Fitout costs vary significantly by sector and specification. In 2025, indicative benchmarks per square metre are: basic office fitout $800 to $1,400; mid-range office $1,400 to $2,200; premium office $2,200 to $4,000+; basic retail $800 to $1,500; mid-range retail $1,500 to $3,000; hospitality with kitchen $2,500 to $5,000+; medical or dental $2,000 to $6,000 plus clinical equipment; beauty or wellness $1,500 to $5,000; gym fitout $800 to $1,500 per sqm plus equipment. A complete 80 sqm cafe fitout with commercial kitchen typically costs $200,000 to $400,000 all-in. A 4-chair dental practice fitout including chairs and equipment typically costs $400,000 to $740,000.

Can I include commercial kitchen equipment in a fitout loan?

Yes. Commercial kitchen equipment including ovens, cooktops, refrigeration, dishwashers, fryers, coffee machines and food preparation equipment can be included in a fitout loan as part of the total project cost, or financed separately as equipment items under a chattel mortgage where they are identifiable capital assets. Financing kitchen equipment under a chattel mortgage gives GST claimability on the next BAS, interest deductibility and depreciation claims, including potential instant asset write-off. We often recommend a split structure: equipment finance for the kitchen hardware and an unsecured business loan for the construction works.

What is a landlord fitout contribution and how does it affect my loan?

A landlord fitout contribution is a cash payment from the landlord towards the cost of the tenant's fitout, offered as a lease incentive to attract a long-term tenant. On new leases of 3 years and above in competitive markets, contributions of $500 to $1,500 per sqm are not uncommon. The contribution is typically paid on reimbursement after the fitout is completed and invoices are submitted, meaning the tenant still needs to fund the full fitout cost upfront and the contribution reduces the outstanding loan balance when received. Almost all contribution agreements contain a clawback provision: if you exit the lease early, you may owe the landlord a pro-rata proportion of the contribution back.

What is a make-good obligation and how much does it cost?

Make-good is the obligation in most commercial leases to return the premises to its original condition at lease end. This means removing your fitout and repairing the premises. Make-good costs for a basic office fitout of 200 sqm typically run $20,000 to $60,000. For a hospitality fitout with commercial kitchen removal, $50,000 to $150,000. For a dental fitout with clinical plumbing removal, $40,000 to $100,000. Make-good is not covered by the fitout loan and must be planned for separately. The best time to limit make-good exposure is during lease negotiation before signing.

What is the difference between Division 40 and Division 43 for fitout tax purposes?

Division 40 (plant and equipment) covers removable and identifiable fitout items such as joinery, light fittings, carpet, commercial equipment and POS systems. These are depreciated at their individual ATO effective life rates and may be eligible for the instant asset write-off. Division 43 (capital works) covers structural construction items such as walls, ceilings, plumbing and flooring as a structural element. These are depreciated at a flat 2.5% per year over 40 years and are not eligible for the instant asset write-off. A fitout contains both, and requesting an itemised fitout contract allows your accountant to maximise the faster Div 40 claims. Always confirm the specific treatment with your accountant.

How long can I finance a fitout for?

The critical rule is that the loan term should never exceed the remaining term of the lease over the fitted-out premises. A 5-year lease from day one supports a loan of up to 5 years. A 5-year lease with 2 years elapsed and 3 years remaining supports a loan of up to 3 years. If your lease includes option periods that you intend to exercise, lenders may in some cases accept a longer term reflecting the total potential lease duration. Operating on a month-to-month holdover is not appropriate for significant fitout finance: secure a new lease term first.

Can I get a fitout loan as a new business?

Yes. New business fitout loans are available from specialist lenders on our panel. Day-1 and early-stage applications are strongest where the director has documented industry experience in the relevant sector, a signed commercial lease is in place, a signed builder quote confirms the fitout cost, personal credit is clean, and a deposit of 20% to 30% is available. For completely new businesses without a trading history, personal property security significantly improves approval odds and rate. We assess your specific situation before recommending the most appropriate pathway.

Can I get a fitout loan without a property to use as security?

Yes. Unsecured fitout loans from $20,000 to $300,000 are available without property security for established businesses with at least 6 to 12 months of trading history and a clean credit profile. Approval is based on the business's demonstrated income from bank statements and BAS. The rate is higher than a property-secured loan, reflecting the absence of collateral. For fitout amounts above $300,000 without property security, a combination of fitout finance and equipment finance for identifiable items can achieve the total funding needed.

Can I finance a franchise fitout?

Yes. Franchise fitout finance is a regular application type. Franchise fitouts are typically specified by the franchisor using approved contractors and standard specifications, which makes the fitout cost more predictable than an independent commercial fitout. Lenders are generally comfortable with franchise fitouts where the franchise itself is an established brand with a documented success rate. We have experience with franchise fitout finance across retail, food and beverage, fitness, beauty and professional services franchise networks. The franchise disclosure document and franchise agreement are typically required as part of the application.

Can I bundle fitout finance and equipment finance into one facility?

In many cases yes, particularly where the fitout and equipment are purchased simultaneously from the same or related suppliers. For a hospitality fitout, bundling the construction contract and kitchen equipment purchase into a single facility simplifies the process. For a dental practice, bundling the fitout construction with the dental chairs and OPG into a single facility is achievable with lenders who accept mixed fitout and equipment applications. We identify which lenders on our panel are most accommodating for bundled fitout and equipment facilities.

How does a rent-free period affect my fitout finance?

A rent-free period is a lease incentive where the landlord waives rent for an agreed period at lease commencement, typically the period when the fitout is being constructed and the premises is not yet trading. The rent-free period frees up cash during the fitout construction phase that would otherwise go to rent. This can reduce the amount of fitout finance needed or improve the business's cash position at the most capital-intensive phase of the lease. Some businesses negotiate both a fitout contribution and a rent-free period. When comparing the value of a rent-free period against a cash fitout contribution, calculate the total cash value of each option over the lease term before deciding which to prioritise.

What documents do I need for a fitout loan?

For an unsecured fitout loan under $150,000 for an established business: ABN, director's licence, 3 to 6 months of business bank statements, and a signed builder quote or fitout contract confirming the total cost. For larger amounts above $150,000: the above plus 2 years of financial statements and tax returns. For a new business: the above plus personal tax returns, evidence of industry experience and a signed commercial lease. For a property-secured loan: property valuation and mortgage details. We advise on exactly what is required once we identify the right lender for your specific fitout and business situation.

What should I do if my landlord contribution is paid after I have already started the fitout?

The majority of landlord contributions are paid on a reimbursement basis: the tenant completes the work, submits tax invoices, and the landlord pays within the agreed timeframe, typically 30 to 60 days after submission. This means the tenant needs to fund the full fitout cost upfront and the contribution reduces the loan balance when received. If you have a fitout loan and receive a landlord contribution after completion, apply the contribution as an early repayment against the loan principal to reduce the interest cost over the remaining term. Check your loan agreement for any early repayment conditions before applying large lump sums.

Why Choose Australian Finance & Loans for Your Fitout Loan

• Independent broker: we compare 50+ lenders including specialist unsecured business lenders, equipment financiers and property-secured commercial lenders for fitouts

• All sectors: office, retail, hospitality, medical and dental, beauty and wellness, gym and fitness, childcare and all other commercial fitout types

• Lease interaction expertise: we understand landlord contributions, make-good obligations, clawback provisions and the lease term vs loan term matching rule

• Tax-aware structuring: we understand the Division 40 and Division 43 split and recommend hybrid structures that maximise the tax efficiency of fitout expenditure

• Franchise fitout experience: established relationships across multiple Australian franchise network fitout requirements

• Bundled facilities: fitout construction and equipment finance in a single facility for hospitality, medical and gym operators

• Fast unsecured: 24 to 48 hours for unsecured fitout loans up to $150,000 for established businesses with clean credit

• New businesses supported: specialist lenders for day-1 ABN and new operator fitout applications with appropriate deposit

• Melbourne-based team with national reach across all states and territories