Broker guide
Business Fitout Finance: Structure and Evidence
Funding a business fitout? Separate equipment, building works and working capital, then check the borrower, lease, security and staged payment evidence.
- Published
- Updated
Business fitout finance funds the equipment and works a business needs to prepare its premises for trading. Structure the funding around each cost, the premises lease and the business’s ability to repay. A single fitout quote can contain assets a lender accepts alongside building work that needs a different facility.
For a broker, the starting point is an itemised project budget. Establish who owns each item, when suppliers need payment and how the client will fund the period before the premises generate income.
Separate the Fitout Components
Separate removable equipment from fixtures, building work and opening expenses before requesting finance. A supplier’s description of the whole job as a fitout doesn’t establish which costs qualify for equipment lending.
Use the quote to build a schedule that follows the actual project.
| Component | Examples | Funding question | Evidence to collect |
|---|---|---|---|
| Removable equipment | Freestanding machinery, desks or appliances | Will the lender accept each asset as security? | Item descriptions, prices and supplier details |
| Fixtures | Fitted counters or installed cabinetry | Who owns them, and can they be removed? | Installation details and relevant lease clauses |
| Building work | Plumbing, electrical work or structural changes | Does the proposed facility fund these works? | Works contract and itemised labour and materials |
| Opening expenses | Stock, wages, rent and launch costs | What funds these costs before trading receipts arrive? | Cash flow forecast and available cash |
Installation can change the assessment. Ask the supplier to separate the equipment price from installation and associated building work. Give the lender that breakdown so its acceptance covers the proposed assets and costs explicitly.
Westpac’s business equipment loan funds new or used equipment and takes security over the equipment. That description doesn’t establish acceptance of every fixture or building-work item in a fitout contract. Obtain the proposed provider’s treatment of those items before allocating the full quote to an asset facility.
Lease, Landlord and Security
The premises lease determines the client’s occupation rights and can affect ownership or removal of installed items. Read it alongside the funding proposal before offering fixtures as security.
Record the remaining lease term separately from any renewal option. Compare both with the proposed finance term. If repayments continue beyond the existing lease, explain how the client intends to retain the premises or use the financed equipment elsewhere.
Resolve these points in the file:
- Whether the borrowing entity is also the tenant, or has a documented right to occupy.
- Which works need landlord consent and whether that consent covers the proposed installation.
- Who owns the installed items and what removal or access rights the finance provider requires.
- What the client must remove or restore when the tenancy ends.
Business Victoria’s lease guidance identifies lease duration, renewal options and fixture ownership as matters to resolve. Apply the actual lease and the relevant state’s requirements to the client’s premises.
Keep landlord contributions separate from the client’s cash. Record the amount, payment trigger and supporting agreement. A contribution reimbursed after completion won’t pay a supplier deposit that falls due before work starts.
The NSW Small Business Commissioner’s fitout guidance recommends agreeing preparation costs in writing before signing the lease. It also identifies rent during the non-trading fitout period as a cost to plan for.
Compare Funding and Supplier Payments
Compare facilities by the costs they accept, ownership and security, then match funding availability to the supplier’s payment schedule. The cheapest quoted repayment won’t solve a deposit the facility cannot fund.
An equipment loan, often called a chattel mortgage, finances an asset the business owns. Under an equipment lease, the financier owns the asset during the lease and the business pays to use it. A business term loan is another structure to assess for accepted works or broader project costs.
For each option, record the funded items and any excluded labour or installation. Compare guarantees, repayment frequency and the final amount due. Keep an equipment lease distinct from the separate lease over the premises.
Westpac’s business loan application guide describes equipment finance, term lending and revolving credit as different facilities. Select from the proposed provider’s supported purposes and settlement terms instead of treating them as interchangeable.
Build a payment schedule showing each supplier claim, its due trigger and the funding source. Include deposits, delivery payments and completion balances. Ask whether the facility settles only on delivery or supports the earlier payments the contract requires.
For a hypothetical $150,000 project, assume $80,000 of removable equipment, $50,000 of building work and $20,000 of opening expenses. Acceptance of the $80,000 equipment component leaves $70,000 to fund elsewhere. If the client contributes $30,000, the remaining funding requirement is $40,000 before fees or overruns.
Those figures illustrate a funding reconciliation, not a lender approval. Identify a source for the $40,000 and reconcile its availability with supplier payments before the client commits to the project.
Prepare the Credit Evidence
Prepare evidence that reconciles the borrower’s project budget with the requested facilities and the cash available to repay them. The file must explain both completion funding and ongoing repayments.
Collect the itemised quotes and works contracts, including payment milestones. Add the premises lease, required consents and the written landlord contribution. Record the borrower’s legal structure and explain any difference between the tenant, purchaser and borrower.
Support repayment assumptions with business financial statements, recent account activity and existing debt commitments. Westpac’s application guide lists financial statements, business tax returns and bank statements among its evidence requests. Use the selected lender’s requirements for the actual facility.
For a new location, distinguish existing trading income from forecast sales. Include rent during the fitout, opening delays and the cost of servicing all proposed facilities together. Explain which assumptions rely on increased turnover after opening.
Keep evidence of the client’s contribution and show what cash remains after it is paid. Include a stated allowance for costs outside the supplier quote. Record any balloon or residual separately from regular repayments and identify the intended repayment source.
Before submitting, reconcile the total project cost to approved funding sources and the client’s contribution. Each supplier payment needs an available funding source, and each repayment needs support in the business cash flow. Resolve any unfunded stage before recommending the client proceed.
