Office fit-out finance: paying for the workspace without draining cash

An office fit-out quote arrives as one number, but a lender reads it as two. One half is stuff that could be carried out the door tomorrow: desks, chairs, monitors, a phone system, a boardroom table. The other half is built into the landlord’s building: partitions, glazing, ceilings, data cabling, a kitchenette and the electrical work behind it all. How you split those halves decides which finance is available, what it costs and how much cash the move eats.

What does an office fit-out actually include?

Before talking to any lender, ask your fit-out contractor or designer to break the quote into lines. A typical commercial office job covers:

• Design and approvals. Space planning, drawings, any building permit and certifier fees.
• Base works. Demolition of the previous tenant’s layout, partitions, doors, glazed meeting rooms, ceilings and lighting.
• Services. Power, data and comms cabling, air-conditioning changes, fire services adjustments.
• Joinery and finishes. Reception desk, kitchenette, storage walls, flooring, paint and signage.
• Loose items. Workstations, chairs, meeting furniture, screens, printers, AV and phone systems.
• Move costs. Removalists, IT migration, downtime and some double rent while both premises are held.

Costs vary widely by city, building grade and specification. Knight Frank’s 2026 Asia-Pacific fit-out cost guide put Sydney and Melbourne at the expensive end of the Australian market and Brisbane and Perth at the cheaper end, which is a useful reminder that a quote from one city won’t translate to another.

Which finance fits each part of the fit-out?

Part of the fit-out	Finance that usually fits	Why
Furniture, IT, AV and phone systems	Equipment finance, chattel mortgage or an operating lease	The lender can take security over the items; terms match their working life
Partitions, ceilings, cabling, joinery	Landlord contribution, cash, a business term loan or a property-secured loan	These become part of the building, so they offer a lender no real security
Design fees, permits, move costs	Cash or a business line of credit	Small, one-off and spread over a few months
Double rent during the move	Cash buffer or line of credit	Temporary, so it shouldn’t sit inside a five-year loan

Where the directors hold equity in real estate, borrowing against it can cover the built-in works over a longer term with lower repayments. That’s a bigger decision than a furniture lease, so weigh it against how long you expect to stay.

Want someone to look at how your fit-out quote could be split? Send us the outline. About a minute of typing, and an enquiry is invisible to credit bureaus.

Is the landlord’s contribution really free?

Office landlords often offer incentives to secure a tenant, and a fit-out contribution is one of the most common forms. Anything they put in comes straight off what you need to borrow, so it’s always worth asking. But it isn’t a gift. Incentives are typically recovered through a higher face rent, a longer lease commitment or stricter terms on how the space is handed back.

Three questions to ask before you accept:

1. What’s the total rent over the full term, with and without the incentive? Compare dollars, not headline rent.
2. Who owns the fit-out at the end? If the landlord paid for it, they may own it, and you may still be responsible for removing it.
3. What does the make-good clause require? Returning a heavily partitioned floor to an open shell can cost a meaningful slice of what the fit-out cost in the first place.

Business Queensland’s leasing guidance encourages tenants to know their maximum affordable price before negotiating. Do the same with the fit-out, and decide in advance how much of it you’re willing to fund yourself versus trading for rent.

How does tax change the real cost?

The two halves of a fit-out are also treated differently for tax, which affects your cash flow in year one.

• Built-in leasehold works such as partitions and ceilings are generally capital works. According to the ATO, leasehold improvements in a leased building are claimed at a fixed statutory rate (2.5 or 4 per cent of the cost each year, depending on the works), not over the length of your lease. If the works are destroyed at the end of the lease, a balancing deduction may be available.
• Loose items such as furniture and IT are depreciating assets. Small businesses with aggregated turnover under $10m can write off eligible items priced under $20,000 apiece in the year they’re installed, using the instant asset write-off, which the ATO confirmed is now ongoing from 1 July 2026.

In practice, that means the furniture and technology part of the fit-out often delivers a faster tax benefit than the building works. Your accountant can tell you how the split plays out for your business.

How much should you borrow?

A sensible way to size the facility:

1. Get an itemised quote and separate movable from built-in items.
2. Subtract the landlord’s contribution and any rent-free period you’d otherwise fund from cash.
3. Decide what cash you’ll use, while keeping at least two to three months of operating costs untouched.
4. Finance the movable items on equipment terms, and fund the built-in balance from a term loan, line of credit or property-secured loan.
5. Check the term against the lease. If you have five years on the lease, a seven-year loan means paying for a fit-out in an office you may no longer occupy.
6. Add a contingency of around ten per cent for the surprises every job throws up, such as fire services changes or extra data points.

Run the movable side through the equipment finance calculator to see how different terms and balloons change the repayment.

Worked example: an accounting firm moves floors

This is an illustration, not a quote. A 14-person accounting practice signs a six-year lease on 300 square metres in a suburban office building. The fit-out quote comes to $420k.

Item	Amount
Base works, partitions, glazed meeting rooms and ceilings	$205k
Cabling, power and air-conditioning changes	$70k
Joinery, kitchenette, flooring and signage	$55k
Workstations, chairs, meeting furniture	$52k
Screens, AV and phone system	$28k
Design, permits and move costs	$10k
Total	$420k

The landlord contributes $120k and three months rent-free in exchange for the six-year term. The partners put in $60k of cash. They finance the $80k of furniture and technology over four years on equipment finance, and take a $160k business term loan over five years for the remaining built-in works, so it’s cleared a year before the lease ends. A small line of credit covers the move and the overlap in rent.

The bank they already deal with approves the term loan because the practice has steady recurring fees and clean financials. Had the bank said no, a property-secured loan against one partner’s home, or a non-bank term lender, would have been the fallback.

Where do banks fit in?

Banks are usually the cheapest source of fit-out money for an established, profitable business, and if your bank offers terms that suit, take that seriously. Where owners run into trouble is timing and security. A bank may want property behind a large built-in fit-out, or its credit process may run past the date the builder needs a deposit. That’s where non-bank lenders, equipment financiers and private lenders come in. Declined already? The declined by the bank guide ranks the next steps.

Planning a retail space or premises you own instead? See shop fit-out finance and renovating business premises.

Getting your new office funded

A new office is a statement about where the business is heading, and the funding should feel just as considered. Once the quote is split, the landlord’s offer is understood and the term fits the lease, the finance tends to fall into place.

If you’d like a hand putting it together, our enquiry form needs about a minute of your time. Nothing is lodged against your credit file, and we don’t hand your enquiry to a roomful of financiers. A team member studies your fit-out plans and phones you to work through them. Accurate numbers for the quote, the lease length and turnover give us the best shot at matching you correctly on the first go.

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