Finance question
Can I finance a fit-out if my lease is short?
Often yes. A short lease does not rule out fit-out finance, but it changes the structure: the loan term usually has to fit inside the lease, and your movable equipment carries more of the security than the built-in work. Where the lease is too short for the loan you want, an extension or equity in other property can close the gap, subject to lender assessment.
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The short answer
The lease sets the term. The equipment sets the security.
A fit-out loan is secured on what you put in the space, not on the lease itself, and lenders split that into two layers. Movable equipment such as cardio gear, treatment chairs, kitchen plant and IT can be removed and resold, so it keeps its value wherever it ends up. Built-in work such as partitions, flooring, joinery and services becomes part of the landlord's building, and a lender can rarely recover it. A short lease leaves that second layer exposed, which is why lenders usually want the loan term to sit inside the lease term, renewal options included.
How much of your budget sits in each layer depends on the trade. In our gym fit-out guide equipment is 40 to 60% of the budget, on an all-in build of $1,500 to $3,000 per square metre (gym fit-out guide). In a GP clinic it is only 20 to 40%, and a 150 square metre practice carries about $300,000 of construction (medical fit-out guide). So a short lease bites harder on a clinic than on a gym: most of a clinic's money is in the walls, and most of a gym's is on the floor, where it can be moved.
There are four common ways round a short lease. Ask the landlord for an extension or a written renewal option before you spend. Finance the equipment on its own and fund the built-in work separately. Offer other security, such as equity in a home or investment property, so the term can run past the tenancy. Or negotiate a landlord contribution or a rent-free period to cut what you need to borrow. Lenders differ widely on how much lease they want to see, and Ventas is a broker across 40+ lenders, so we match your lease to one that fits. There is no upfront fee to you; the lender pays us on settlement.
Do you qualify?
What a lender checks when the lease is short.
Your lease document
Time left, any renewal options, and clauses that let either side end it early.
Equipment split out
A quote that separates movable gear from built-in work.
Landlord consent
Some lenders ask for the right to collect equipment if the lease ends.
Other security
Equity in a home or property if the loan needs to outlast the tenancy.
A short lease is a structure problem, not a dead end
Equipment travels
Gear can be moved or sold, so it holds value when the lease ends.
Property outlasts the lease
Equity in other property lets the term run past the tenancy.
Options count
A written renewal option can stretch what the lender will fund.
A worked example
A GP fits out a four-room clinic for $350,000 all-in on a three-year lease with no option. Equipment is about a third, roughly $115,000, so $235,000 is built into the walls. The equipment is financed on its own. The built-in work is funded against equity in the GP's home so the term is not capped by the lease, while a renewal option is requested from the landlord. Illustrative only.
Common questions
Frequently asked questions
How short is too short for a fit-out loan?
There is no single cut-off, because each lender sets its own. A lease with little time left usually means a shorter loan, a lease extension or extra security, and the same fit-out can be fundable with one lender and not another.
Does my landlord have to agree to the finance?
Not always. Equipment finance is secured on the equipment, but some lenders ask for the landlord's consent to collect it if the lease ends, and any change to the lease itself needs the landlord's signature.
Can I finance the equipment even if the built-in work is hard to fund?
Often yes. Movable equipment can usually be financed on its own, up to $500,000, with the lease playing a smaller part in the assessment than it does for the walls and joinery.
Should I sort out the lease before I finance the fit-out?
If you can, yes. A longer term or a renewal option before you spend widens your finance options and also protects the money you put into the walls, which no lender can recover if the landlord does not renew.