Quick answer
Opening or refitting premises means paying for the lease bond, fit-out, equipment, signage, stock and early wages before the new site earns. Plan the full budget including a contingency, decide how long the site must trade before it covers its costs, and choose funding with repayments that begin when revenue does. Unsecured and property-backed options both apply.
Key points
- Budget for everything, then add a buffer.
- New sites often take months to break even.
- Repayments should start when revenue does.
- Keep the original business safe from the new one's teething problems.
- Unsecured
- Typically $5k – $500k
- With property
- $20k – $5m
- Biggest risk
- Slow ramp-up
- Plan for
- Months of costs before profit
The most exciting cash call in business is also the riskiest. A new shopfront, a second clinic or a bigger workshop spends money months before it makes any. Costs arrive in a rush, revenue arrives in a trickle, and the original business is often expected to fill the difference.
What a fit-out really costs
First-time expanders underestimate the long tail of costs. A realistic list:
| Cost | Notes |
|---|---|
| Lease bond and advance rent | Often several months’ rent up front |
| Design, consents, legal | Fees land before any work starts |
| Building work and fixtures | The headline cost, usually exceeded |
| Equipment and IT | Tills, machines, networks |
| Signage and branding | Often forgotten in early budgets |
| Opening stock | Paid for before the first sale |
| Insurance and utilities | Connected before trading |
| Staff before opening | Wages for training and set-up |
| GST on all of it | Recovered through your return, but paid at the time |
Add a contingency of a sensible fraction on top. Hidden problems in old buildings are close to guaranteed.
The ramp-up problem
A new site rarely opens at full speed. Customers have to find it. Staff need to learn it. So the question is not just “how much to open?” but “how many months can I afford to run at a loss?”
Build the forecast in two parts:
- Set-up cash: everything spent before opening.
- Ramp-up cash: monthly shortfall between costs and takings until break-even.
The sum of the two is what you need funding to cover.
Planning a new site? Start the 60-second enquiry and talk your numbers through with a real person.
Funding routes
Unsecured cash
For smaller refits, an unsecured loan sized on current takings can pay for work in a few days. It is quick and avoids property security.
Property-backed funding
For larger projects, equity in an existing property lets you borrow more. Amounts run from $20k to $5m. Some structures keep repayments light during the ramp-up. See property-backed cash.
A bridge for timing
If a landlord contribution, grant or insurance payout is coming, a short-term loan can bridge until it lands.
Mixed approaches
Many owners combine a lump sum for the fit-out with a standby cash line for the shaky early months.
Make the repayments fit the ramp
The wrong structure is a heavy repayment from week one. Better:
- Interest-only or reduced early repayments
- Interest built into the facility
- A term long enough that weekly strain stays low
Check what happens if opening is delayed by a month. Construction delays are normal.
Protect the original business
Expansion fails when the parent business gets drained. Guard against it:
- Track the new site’s numbers separately.
- Set a limit on how much the original business will contribute, and what you’ll do if you hit it.
- Keep a buffer. Use the cash runway guide to count weeks of cover for the whole group.
- Look at the growth cash gap to see why expansion eats working capital.
Test the lease before you sign
- Is there a rent-free fit-out period?
- What are the make-good obligations when you leave?
- What are the bond or guarantee terms?
- Is there a right of renewal at a fair price?
A lawyer should read it before the signature.
Check the numbers before the keys
Before committing to a lease, test the site with cold numbers. Estimate the weekly takings needed to cover rent, wages, stock and finance, then compare with what similar sites in the same area achieve. Ask the landlord for footfall data, speak to neighbouring traders and visit at different times of day. If break-even demands takings well beyond your current best week, the site is a stretch. A cautious owner might delay a month to negotiate a rent-free fit-out period, which can be worth more than any discount on the work itself.
An illustrative example
Illustrative only. A Hastings café with a busy flagship decides to open a second site in Havelock North. Fit-out, equipment, bond and opening stock total $185k, and the owner expects four months to reach break-even at a loss of about $9k a month. She borrows $230k, secured against the flagship’s building, with interest-only repayments for the first six months and a standby line for contingencies.
Start the conversation
If expansion is on your mind, share the budget and timeline. It takes about a minute, asking involves no credit check, and your details stay with one team. A real person helps you work out which structure leaves you room to breathe.
Honest numbers on costs, timing and your existing takings help us suggest funding that matches your ramp-up.
Frequently asked questions
What does a fit-out budget usually include?
Design and consents, building work, fixtures, equipment, signage, IT, stock, deposits and bonds, insurance, legal fees and the wages of staff trained before opening.
How long until a new site pays its way?
It varies by trade, but many owners plan for several months of trading before costs are covered. Use cautious assumptions.
Can I fund it unsecured?
Smaller projects can be funded this way, sized on current takings. Larger ones often benefit from property security.
How can I protect the existing business?
Keep the new site's costs and funding separate in your forecast so you can see whether the original business is carrying more than it should.