Can a UK business loan be used to finance a shop, office or restaurant fit‑out?

Summary: Yes — in many cases a UK business loan or other commercial finance product can pay for a shop, office or restaurant fit‑out. Which solution is best depends on project size, whether you own or lease the premises, your cashflow and how the work will be staged. Typical options include unsecured business loans for smaller jobs, secured commercial loans for larger projects, asset/equipment finance for fittings and kitchen kit, specialist staged fit‑out loans, bridging or development finance for rapid or large works, and invoice/working capital to smooth cashflow. If you’re looking for quotes, start a Free Eligibility Check and we’ll match you with lenders or brokers who specialise in fit‑out funding. Get Quote Now — Free Eligibility Check

Short answer — yes (but it depends)

Many UK business loans and commercial finance products can be used to fund shop, office or restaurant fit‑outs. The right product depends on scale, timing and what you’re buying: building works and structural changes are treated differently to equipment, fixtures and loose furniture. If you need staged payments to contractors or rapid cash to start works, specialist staged drawdown or bridging may be required. Free Eligibility Check — Get Quote Now

What is a fit‑out?

A fit‑out converts a building shell into a working shop, office or restaurant. Lenders and accountants commonly split fit‑outs into categories because these affect value and lending decisions:

• Shell & core — basic building delivered by landlord; tenant does almost everything.
• CAT A/CAT B (commercial) — CAT A is basic finishes (floors, ceilings, lighting); CAT B is tenant‑specific works (partitions, bespoke joinery).
• Tenant improvements / bespoke fit‑out — kitchens, ventilation, extraction, specialist plumbing, heavy services and bespoke joinery.

Common fit‑out components: kitchens & extraction (restaurants), flooring and shelving (retail), partitions & AV (offices), M&E upgrades, lighting, signage and fire safety works. Lenders treat durable fixtures differently to soft fittings and consumables.

Which types of commercial finance can fund a fit‑out?

Different lenders specialise in different parts of a fit‑out. Below is a practical guide to the most commonly used products, what they typically fund, and pros/cons.

Unsecured business loans

What it funds: small to medium fit‑outs, fixtures and some contractor costs. Typical sizes: £10,000–£250,000 (depending on lender). Pros: quick, no property charge. Cons: higher rates, shorter terms, typically limited to smaller jobs. Good where you can’t or won’t provide security.

Secured commercial loans & commercial mortgages

What it funds: larger fit‑outs where the lender can take a charge over freehold or leasehold. Typical sizes: £50,000–multi‑million. Pros: lower interest vs unsecured, longer terms. Cons: stricter underwriting, valuations, and required loan‑to‑value limits.

Asset & equipment finance (hire purchase / leasing)

What it funds: kitchen machinery, refrigeration, furniture, IT, AV. Typical sizes: from £10K upwards per asset. Pros: preserves cash, can include maintenance, often tax‑efficient. Cons: doesn’t fund structural building works.

Fit‑out or refurbishment finance (specialist lenders)

What it funds: staged contractor payments, project management fees, materials. Pros: staged drawdowns tied to milestones; lenders familiar with contractors and valuation of works. Cons: requires robust quotes, schedules and often higher admin than a straight loan.

Invoice finance & working capital

What it funds: short‑term cashflow during works, useful if you’re waiting on invoices or seasonal receipts. Pros: flexible and fast. Cons: ongoing fees and doesn’t cover capital expenditure beyond short term needs.

Development / refurbishment loans

What it funds: large multi‑site refurbishments or major conversions. Pros: tailored facilities, often interest rolled into longer term. Cons: complex assessment and higher minimums; best arranged via commercial brokers.

Bridging loans

What it funds: immediate cash to start works while longer term finance is arranged. Pros: very fast. Cons: expensive, short term — used sparingly and repaid from long‑term funding or sale/refinance.

Not sure which is right for your project? Get a Free Eligibility Check and we’ll match you with lenders and brokers who can advise on fit‑out funding.

What lenders look for: eligibility & underwriting criteria

Lenders assess the business, the project and the security available. Common criteria include:

• Financials & cashflow: last 2–3 years of accounts (or management accounts), cashflow forecasts showing how the business will afford repayments and operating costs.
• Trading history & turnover: lenders prefer established trading but specialist panels will consider newer businesses if the project and security are strong.
• Credit history: business and director credit checks; adverse histories may limit options but a broker can often find suitable lenders.
• Lease & landlord covenants: lenders commonly require evidence you can carry out works — landlord consent, length of lease remaining and any restrictions.
• Sector risk: hospitality and retail are seen as higher risk than professional services or long‑term office lets; this affects pricing and deposit requirements.

Documents typically required: business accounts, bank statements, VAT returns, lease or title, contractor quotes, project schedule and costings, and management forecasts.

Costing, security & repayment terms — what to expect

Rates and terms vary widely by product and risk profile. As a guide:

• Unsecured loans: higher APRs, shorter terms (2–5 years typical for fit‑outs).
• Secured loans: lower rates, terms up to 10–20 years if property security used.
• Asset finance: terms tied to useful life of equipment (2–7 years).
• Bridging: short, expensive; interest‑only or rolled interest until repayment.

Security types include fixed & floating charges, mortgages/charges on property, director personal guarantees and retention of title on equipment. Lenders also apply loan‑to‑cost tests — you may need to contribute a deposit or demonstrate a reasonable equity position.

Tax and accounting considerations (capital allowances & VAT)

Fit‑out spending can be treated differently for tax. Some fixtures and plant may qualify for capital allowances; certain items may be considered revenue (repairs) rather than capital expenditure. VAT on contractor invoices may be recoverable if your business is VAT‑registered. Always check with your accountant — the following is general information, not tax advice.

Permissions, landlord consent & contract evidence (essential for lenders)

Lenders want to be sure you can legally complete the works. Typical requirements:

• Written landlord consent or an appropriate lease clause permitting fit‑out.
• Planning permission and building regulation approvals where applicable (especially for extraction and structural work).
• Contractor quotes, a staged schedule and professional oversight (project manager/quantity surveyor) for larger jobs.

For restaurants especially, extraction, ventilation and fire safety compliance are scrutinised closely by both insurers and lenders.

Typical application process & timeline — from enquiry to drawdown

1. Initial enquiry & eligibility check (hours to 48 hours).
2. Document submission and lender shortlist (3–10 days).
3. Terms or indicative offer — may include valuations or technical review (1–3 weeks depending on complexity).
4. Legal works, landlord consent confirmation and final approval (1–4 weeks).
5. Drawdown — single or staged payments to contractor as milestones met.

Typical times: unsecured or asset finance can be arranged in days–weeks; secured commercial and specialist staged facilities often take several weeks. Bridging can be fastest but costliest.

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Example scenarios (short real‑world examples)

• Small café replaces fryers and counters: asset finance for kitchen equipment + unsecured loan for minor works (total ~£25k).
• High‑street shop complete refit including joinery and M&E: staged fit‑out loan with drawdowns tied to contractor milestones (~£150k).
• Multi‑site restaurant chain completes a roll‑out: development/refurbishment facility arranged through a commercial finance broker with longer-term repayment tied to projected sales uplift.

How UK Business Loans can help you

UK Business Loans does not lend money. We connect businesses with lenders and brokers who specialise in commercial and fit‑out finance, and we can quickly identify which partners are most likely to help your project. Our service is free and no‑obligation: complete a short enquiry and we’ll match you with suitable options and specialists who will contact you with quotes.

Submitting an enquiry is not an application and will not affect your credit score. Typical response time after submission is often within hours during business days. Get Quote Now — Free Eligibility Check

Compliance & important disclaimers

UK Business Loans is an introducer — we do not lend or provide regulated financial advice. We match enquiries with lenders and brokers that may contact you with product information. This page is for general information only and does not constitute financial or tax advice. Always read lender terms carefully and seek independent professional advice where appropriate.

Frequently asked questions (FAQ)

Can I use a standard business loan for fit‑out work?

Yes — for many small and medium fit‑outs an unsecured or secured business loan will cover the costs. Larger or staged projects may need specialist fit‑out or development finance.

Do lenders require landlord permission?

Often yes. Lenders usually want written evidence that you have the right to carry out the work — landlord consent or lease clauses are commonly required.

Can I include VAT in my loan amount?

Some lenders will include VAT in the loan if it is unrecoverable; if you’re VAT‑registered you may prefer to reclaim VAT and borrow only the net amount. Discuss this with your accountant and potential lender.

How long does fit‑out finance take to arrange?

Unsecured and asset finance can be arranged in days to a few weeks. Secured or specialist staged facilities typically take several weeks depending on valuations, legal work and landlord consent.

What if I have imperfect credit?

Imperfect credit doesn’t always rule you out. Some lenders and brokers specialise in higher‑risk profiles — a broker can match you to lenders who take your full business story into account.

Will enquiring through UK Business Loans affect my credit score?

No — submitting the initial enquiry is not a formal application and won’t affect your credit file. Lenders may perform checks later if you progress with an application.

Ready to get quotes? Complete a short enquiry and we’ll match your business to lenders and brokers who can provide fit‑out quotes and eligibility guidance. It only takes a few minutes. Get Started — Free Eligibility Check

Note: minimum typical facilities we arrange start at around £10,000 and upwards. Enquiry is free and there is no obligation to proceed.

For specialist facilities and more detail on structured lending options see our commercial finance resource.

1. Can a UK business loan be used to finance a shop, office or restaurant fit‑out?
Yes — many UK business loans and commercial finance products can fund fit‑outs, though the right solution depends on project size, lease/ownership and whether works are structural or equipment‑based.

2. What types of fit‑out finance are available for shops, offices and restaurants?
Common options include unsecured business loans, secured commercial loans/commercial mortgages, asset/equipment finance, specialist staged fit‑out loans, bridging/development finance and invoice/working capital facilities.

3. Do lenders require landlord permission before approving fit‑out funding?
Often yes — lenders typically want written landlord consent or lease clauses confirming you can carry out the works, plus any required planning or building‑regulation approvals.

4. Can I include VAT in the loan amount for fit‑out costs?
Some lenders will include VAT if it’s unrecoverable, but VAT‑registered businesses often reclaim VAT and borrow only the net cost, so check with your accountant and lender.

5. How long does it take to arrange fit‑out finance?
Timescales vary: unsecured and asset finance can be arranged in days to a few weeks, while secured or specialist staged facilities usually take several weeks due to valuations, legal work and landlord checks.

6. What security and guarantees do lenders typically ask for on fit‑out loans?
Lenders commonly require fixed or floating charges, property mortgages/charges, director personal guarantees and sometimes retention of title on equipment, plus a reasonable loan‑to‑cost position.

7. Can I finance kitchen equipment and fixtures separately from building works?
Yes — asset and equipment finance (leasing or hire‑purchase) is well suited to durable items like kitchen machinery, refrigeration, furniture and AV, while building works are funded by loans or specialist fit‑out facilities.

8. Can a business with imperfect credit still get funding for a fit‑out?
Imperfect credit doesn’t automatically rule you out — specialist lenders and brokers on our panel often consider higher‑risk profiles and alternative security or terms.

9. When should I consider bridging or development finance for a fit‑out project?
Consider bridging for immediate short‑term cash to start works or cover timing gaps, and development/refurbishment loans for large or multi‑site conversions where tailored, longer facilities are needed.

10. Will submitting an enquiry through UK Business Loans affect my credit score?
No — completing our free eligibility enquiry is not a formal application and will not affect your credit file; lenders may perform checks only if you progress to a formal application.