Fitout Financing: 5+ Ways to Get Funding

Your business is growing. Or maybe you’re just starting out.

You need to find a new space, lock in a lease agreement, and then fit it out to meet your business needs. There’s significant capital involved in this process. It could feel overwhelming to most business owners. That’s where fitout finance comes into play. 

In this guide, we’ll tell you everything you need to know about financing your fitout. We’ll also share some steps you should take to determine if you need additional financing, helping you decide which mix of capital you should use to bring your fitout project to life.

Assessing the needs of your business is the first step towards understanding your budget. Consider the size of your space, the nature of your business, and the specific requirements of your team. This initial evaluation lays the foundation for determining the scope of your fitout project. From there you can decide whether or not you’ll need additional capital to finance your fitout. There are four common ways to do this. 

1. Internal Funds (Cash)

The most straightforward method is to allocate funds from your internal budget. This could involve setting aside a portion of your operational budget or earmarking funds from a dedicated capital expenditure pool. While this method offers autonomy and control, it's crucial to ensure that your budget aligns with the scale and requirements of your fitout.

2. Traditional Bank Loans

Traditional bank loans are a classic avenue for financing fitout projects. They provide the advantage of fixed interest rates and structured repayment plans. As with most bank loans, there may be a rigorous approval process, with detailed financial assessments and collateral requirements.

3. Fitout Incentives

Did you know that your landlord may be open to financing your fitout? Fitout contribution is a common incentive that landlords use to attract promising, long-term tenants. If you are currently shopping around for a new space or negotiating a commercial lease right now, ask what incentives are available that would help sweeten the deal. It’s not uncommon to have some or all of the cost of your fitout paid for (depending on budget or course). 

4. Fitout Finance Specialists

Outside of traditional banks, there are finance specialists who can help you secure funding. These experts understand the intricacies of the fitout process and collaborate with financial institutions to tailor solutions that align with your specific needs. This option streamlines the financing process, providing you with a dedicated partner focused on the success of your fitout.

5. Operating Lease 

Some businesses need expensive, industry-specific equipment to run their day-to-day operations. During an expansion, the business may need to secure more of this equipment to scale productivity. If this is the situation you’re in, seek to acquire an operating lease, where you essentially rent (or rent to own) equipment and/or office furniture at a much lower initial cost.

6. Remortgage (Full or Partial)

Similar to cash, this option is a very straightforward way to secure a fitout loan. Yet there are significant tax and legal implications that can shape how this loan works, as you will be using a residential asset to back a commercial one.

Disclaimer: We are not tax or legal professionals. Please speak to your accountant and/or legal expert to determine which options are best for your specific situation.

So you have found a space and selected a fitout professional. If you think you’ll need additional financing here’s what you should do next. 

1. Clearly Define Your Objectives

Begin with a clear understanding of your fitout objectives. What do you want to achieve with your new space? Whether it's fostering collaboration, enhancing brand identity, or optimising functionality, clearly defined objectives will guide your budgeting decisions.

2. Prioritise Must-Haves vs. Nice-to-Haves

Distinguish between essential elements and optional enhancements. This prioritisation ensures that your budget is allocated to the aspects that have the most significant impact on your business goals.

3. Factor in Contingencies

Fitouts, like any construction or renovation project, can encounter unexpected challenges. Allocate a portion of your budget for contingencies to mitigate potential surprises and keep your project on track.

4. Meet With Your Fitout Provider

Now is the time to have an honest conversation about the budget. By now you may have received quotes for potential works. This meeting should be more about the specifics around pricing for select finishes, furniture, materials, and joinery. If your provider ends up being Canopy Fitouts, rest assured that there will be no ambiguous costs in your quote. We pride ourselves on clear, open, and ongoing communication around costs and deadlines, ensuring there are no surprises along the way.

During these financial conversations, we suggest you loop in your accountant or invite them to join you in person.

5. Understand Your Lease Incentives and Rent-Free Periods

In the context of fitout financing, it's essential to explore the potential benefits offered by lease incentives and rent-free periods. These concessions, often negotiated with landlords, can significantly ease the financial burden of your fitout.

6. Decide How You’ll Finance 

With a clear idea of budget and costs locked in, you should now be able to decide which method of financing is best for your situation. Maybe cash is easiest, and any additional costs will be subsidised by your landlord. Maybe a  loan is best, giving you extra breathing room to focus on creating your dream fitout. 

Whatever your situation and budget, there are many options to help you create a fitout optimised for your desired standards.

We know that cost is a top priority for business owners looking to start and finance a fitout project. It’s a significant investment, and it needs to be done perfectly. In a situation like this, who wouldn’t want to make sure that their hard-earned money is being used effectively?

This is why at Canopy Fitouts, we place transparency at the heart of everything we do. Clear, honest discussions about costs. Accurate quotes. On-time project delivery. This transparency gives you more control over how you finance your fitout and more freedom to focus on your business during this transitory period. 

Want to learn more about fitout costs? Check out this guide. Already decided on a location and want to start your fitout? Speak to our team today and we’d be more than happy to give you advice on cost, budgets, requirements, and timeframes for your office or commercial fitout. Give us a call at 1800 434 868 or email info@canopyfitouts.com.au.