What is fit-out finance and how does it work for refurbishments and refits?

Short answer: what fit-out finance is and how it works

Fit-out finance is a form of commercial funding that covers the costs of refurbishing, refitting, or fitting out business premises, including fixtures, fittings, furniture, and mechanical and electrical works. It spreads the project cost over an agreed term, helping UK SMEs preserve cash flow while upgrading a site to trading standard. Funding can be structured as an unsecured loan, asset-backed agreement, lease, or a combination with staged drawdowns aligned to the build schedule.

Repayments are typically monthly and may be fixed or variable depending on the provider and facility type. Many lenders support phased releases against approved supplier invoices, so contractors can be paid on time as the project progresses.

Best Business Loans does not supply loans directly. We help established UK businesses navigate options and get introduced to suitable lenders or brokers for their refurbishment, refit, or new-site launch.

What can fit-out finance cover and when is it suitable?

Typical costs you can finance

• Design, planning, and professional fees, including project management and building control costs.
• Construction, joinery, partitions, flooring, ceilings, and shopfront works.
• Mechanical and electrical installations: HVAC, lighting, power, data, alarms, CCTV, and fire systems.
• Furniture, fixtures, and equipment (FF&E), including counters, shelving, cabinets, and loose furniture.
• Signage, branding, and customer experience features such as audio-visual screens and wayfinding.
• IT and POS systems, telecoms, Wi-Fi infrastructure, and payment terminals.
• Compliance and accessibility upgrades, including DDA adaptations and health and safety measures.
• Specialist fit-outs for hospitality, healthcare, education, automotive, and manufacturing environments.
• Contingency allowances and certain soft costs agreed at credit approval.

When is fit-out finance a good fit?

• Opening a new site where upfront capital is better deployed on inventory, staffing, or marketing.
• Refurbishing to meet brand standards, regulatory requirements, or landlord obligations.
• Rebranding or reconfiguring a layout to increase capacity, throughput, or customer dwell time.
• Rolling refurb programmes across multi-site retail, hospitality, healthcare, or leisure estates.
• Insurance reinstatement projects where timing gaps exist between claim settlement and contractor milestones.

For an in-depth overview, see our dedicated page on fit-out finance options for refurbishments and refits. You can also submit a quick quote to check indicative eligibility before speaking with a provider.

How the funding process works step by step

A practical, staged approach to funding your refit

1. Initial enquiry and Quick Quote. Share brief details about your business, budget, timeline, and premises status (leasehold/freehold). You can indicate whether you prefer unsecured, asset-backed, or blended solutions.
2. AI-powered matching. Our system compares your profile with active UK lenders and specialist brokers who fund your sector and project type. You’ll only be introduced to relevant providers.
3. Indicative terms / Decision in Principle. If a provider is interested, they may issue an outline with estimated limits, pricing, term, and conditions, subject to underwriting and due diligence.
4. Underwriting and documents. Expect requests for management accounts, filed accounts, bank statements, business plan or project overview, and supplier quotations or a bill of quantities.
5. Project validation. For larger builds, lenders may seek a schedule of works, timeline, landlord consent, and evidence of relevant insurances. Some may appoint a surveyor or monitoring quantity surveyor.
6. Legal and security. Where applicable, documents may include personal guarantees, a debenture, or chattel mortgage over funded assets. Leasehold projects often require landlord consent letters.
7. Drawdown and payments. Funds are released in stages against approved invoices or milestones. You pay contractors promptly, keep momentum on site, and begin repayments per the agreed schedule.

Typical documents lenders ask for

• Last 3–6 months’ business bank statements and latest filed accounts.
• Year-to-date management accounts and aged debtor/creditor lists, where relevant.
• Detailed quotes, invoices, or tender pack from your contractors and suppliers.
• Project plan: scope, timings, milestones, and contingency arrangements.
• Premises paperwork: lease agreement, heads of terms, or title documents for freeholds.
• Insurance certificates and any required compliance documentation.

A clear paper trail and a realistic timeline improve confidence and can speed up approvals. Providers fund projects more smoothly when the scope and costs are transparent.

Costs, terms, eligibility, and security

Common structures and terms

• Term length: Typically 12–60 months, aligned to asset life and commercial benefit.
• Repayment profile: Fixed monthly repayments are common; seasonal or stepped profiles may be available for cyclical sectors.
• Staged drawdowns: Releases tied to milestones reduce interest on undrawn funds and match supplier billing.
• VAT treatment: Options may include VAT deferral on eligible assets, subject to provider policies.
• Blended facilities: A mix of unsecured loan plus asset finance or leasing, depending on what is fundable as “moveable” versus “integral”.

What affects pricing?

• Trading performance, credit profile, time in business, and sector risk.
• Project scale, complexity, asset mix, and proportion of soft costs versus tangible items.
• Security offered, such as guarantees, debentures, or chattel mortgages, and LTV on any asset-backed elements.
• Supplier reputation, certainty of programme, and robustness of cash flow forecasts.

Eligibility at a glance

• UK-registered limited companies and LLPs are most commonly supported.
• Established trading history is usually required; early-stage firms may need stronger security or equity support.
• Turnover thresholds vary by provider, but lenders look for affordability and clear repayment sources.
• Adverse credit does not automatically preclude funding, though conditions or pricing may differ.

Security and guarantees

• Personal guarantees (PGs): Often requested for SME facilities to align incentives.
• Debenture or fixed/floating charges: Common for larger multi-asset projects.
• Chattel mortgage over FF&E: Used where items are readily identifiable and removable.
• Landlord consent: Typically required for leasehold fit-outs, especially where alterations are structural or integral.

Risks and important considerations

Taking on finance creates a contractual obligation; missed payments could affect your credit rating and may result in additional charges. Ensure project timelines are realistic, contingency plans exist, and that your trading forecasts comfortably support repayments. Independent professional advice may help you decide if finance is appropriate for your business.

Pros, cons, alternatives, and how Best Business Loans helps

Advantages of fit-out finance

• Preserves working capital for staffing, stock, or marketing at opening.
• Aligns cost to benefit by spreading payments over the useful life of the fit-out.
• Supports phased contractor payments and reduces programme delays.
• Can blend unsecured and asset-backed lines for a tailored solution.
• May be off–balance sheet under certain leases, subject to accounting advice.

Considerations and pitfalls to avoid

• Over-specifying can inflate budgets and stress cash flow without matching returns.
• Change orders mid-project can increase costs and extend timelines.
• Some elements are hard to finance if they’re integral to the building and lack resale value.
• Security and guarantees may be required; understand obligations before you proceed.

Alternatives compared

How Best Business Loans supports your project

We use AI-driven matching to introduce you to finance providers experienced in your sector, project size, and premises type. This saves time, reduces the need to repeat your story, and helps you compare options from relevant lenders and brokers. It’s free to submit an enquiry, and there is no obligation to proceed.

We don’t claim to offer the lowest rates on the market, and we do not lend directly. Our aim is to help you quickly find trusted providers, so you can make informed decisions based on your budget, timeline, and risk appetite.

Ready to explore your options? Complete a Quick Quote for a fast eligibility check and potential Decision in Principle, so you can plan your refurbishment with confidence.

Key takeaways

• Fit-out finance helps UK businesses spread the cost of refurbishments and refits over time.
• Funding can include staged drawdowns tied to contractor milestones for smoother cash flow.
• Structures vary from unsecured loans to asset-backed agreements and leases.
• Clear scope, credible suppliers, and realistic forecasts improve approval chances.
• Best Business Loans introduces you to suitable lenders and brokers through AI-powered matching.

Information provided is for general guidance only and does not constitute financial, legal, tax, or accounting advice. Finance is subject to status, affordability, and provider criteria. Security and personal guarantees may be required. Late or missed payments can impact your credit rating. Updated October 2025.