Short answer — what most lenders expect

At the enquiry or introduction stage, lenders usually accept a clear, signed or draft heads of terms (HoTs) and contractor quotations to assess the project and give an indicative or conditional offer. HoTs let underwriters model rent, lease term and break clauses so they can price risk.

For most property‑backed, longer‑term or high value fit‑out finance, the lender will require a signed lease and proof of landlord consent before releasing funds or registering charges against the property. This protects the lender if the tenant’s right to occupy is challenged.

Exceptions exist: asset finance for fixtures or equipment, unsecured working capital, or short‑term bridging may proceed on HoTs or other documentation, but expect tighter terms or higher costs.

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Why a lease matters for fit‑out finance

Lenders view a lease as evidence of the tenant’s legal right to occupy the premises. For fit‑out finance this is important for three reasons:

• Security of the asset: Lenders want confidence that improvements or equipment they help fund will remain with the business throughout the loan term.
• Business continuity: If the borrower loses occupation (e.g. a failed lease negotiation), the borrower’s ability to repay drops sharply.
• Registration of security: For property‑backed lending, lenders often require a charge or legal mortgage which relies on a valid lease and landlord permissions.

Example: a café spending £120,000 on a bespoke fit‑out will usually find a commercial lender asks for a signed lease and landlord’s licence to alter before they release a long‑term facility.

Heads of terms vs signed lease — stage‑by‑stage

Application and introduction stage (what lenders accept)

At the initial enquiry lenders or brokers will accept:

• Detailed heads of terms (HoTs) — parties, term, rent, break clauses, rent‑free periods, repair obligations and key conditions.
• Contractor quotes and a project schedule.
• Business trading information and cashflow forecasts.

With these, specialist fit‑out lenders or brokers can typically provide an indicative or conditional quote.

Offer, documentation and legal stage (what lenders usually require)

Once underwriting is complete lenders will issue a conditional offer which will commonly be subject to:

• Legal review by solicitors.
• Receipt of a signed lease (or evidence of exchange) and landlord consents.
• Valuation or survey if property security is involved.

Funds are rarely released for long‑term property‑backed fit‑out finance until the solicitor confirms the lease and any relevant landlord permissions are in place.

Practical exceptions

Some lenders are more flexible:

• Asset/equipment finance: Lenders focus on the financed assets (e.g. kitchen equipment) and may not require a lease.
• Short‑term bridging or unsecured facilities: May advance funds on HoTs but typically cost more and involve stricter covenants.
• Specialist pre‑let or development lenders: May accept HoTs when lending against future income streams.

Types of lenders and their likely documentation requirements

• Mainstream banks: Usually require a signed lease, property security and landlord consents for long‑term facilities.
• Specialist fit‑out lenders & finance houses: More willing to start on HoTs and quotes; signed lease expected at or before drawdown for larger deals.
• Asset finance providers: Focus on assets and invoices; lease not always necessary.
• Bridging/alternative lenders: May accept HoTs for speed, but often at higher rates and with personal guarantees.
• Brokers (via UK Business Loans): We match you with lenders who are most likely to accept your documentation at each stage.

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Typical documents lenders ask for when financing a fit‑out

Having these ready speeds decisions:

• Heads of terms (if lease unsigned) or the signed lease
• Contractor quotes, schedules of works and procurement plans
• Landlord consent or Licence to Alter
• Company accounts, management accounts and director IDs
• Business plan and cashflow projections
• Site photos and project timeline
• Planning or building control approvals (if required)
• Survey or valuation (where property security is used)

Tip: a clear set of HoTs plus contractor quotes often secures a conditional offer quickly.

Landlord consent, licences to alter and dilapidations — why they matter

Landlords often require a Licence to Alter for significant works. Lenders want evidence of landlord consent because:

• It prevents disputes that could delay or undo works.
• It clarifies obligations at lease end (reinstatement/dilapidations) which lenders include in risk assessments.

If a landlord insists on reinstatement, lenders will factor potential dilapidation costs into the facility.

Timings — when you’ll need a signed lease

Typical schedule:

1. Enquiry → eligibility check (HoTs + quotes is usually enough)
2. Underwriting → conditional offer (legal review begins)
3. Pre‑drawdown/completion → signed lease + landlord consents normally required

Allow roughly 4–8 weeks from enquiry to drawdown for standard cases; specialist lenders or emergency bridging can be faster.

Practical tips to speed approval

• Prepare a clear heads of terms document — solicitor templates help.
• Get detailed contractor quotes and a project schedule early.
• Request landlord consent/Licence to Alter during lease negotiation.
• Supply concise cashflow forecasts and recent accounts.
• Work with specialist brokers — they know which lenders accept HoTs for initial offers.

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Common scenarios — worked examples

Retail shop fit‑out (established trader)

Bank likely wants a signed lease pre‑drawdown. HoTs + quotes will secure a conditional offer quickly.

Café fit‑out using equipment finance

Asset finance for ovens/fixtures may proceed without a signed lease, but landlord consent remains advisable.

Pop‑up or short‑term site

Short‑term bridging or unsecured facilities may advance funds on HoTs, but expect higher rates and additional guarantees.

For more on typical fit‑out lending options, see our detailed fit‑out finance overview fit‑out finance.

Costs & legal considerations

Budget for legal fees (borrower and landlord), valuation/survey fees, lender arrangement fees and possible landlord refurbishment or reinstatement costs. Solicitor turnaround times can be the longest part of the process, so instruct early.

How UK Business Loans helps

Complete a short enquiry form and we’ll match your business with lenders and brokers experienced in fit‑out finance (minimum deals we typically arrange start at around £10,000). This is a no‑obligation information request — not an application. Once matched, selected lenders or brokers will contact you with quotes or next steps.

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Frequently Asked Questions (FAQ)

Can I get fit‑out finance without a signed lease?

Possibly — asset finance, some unsecured facilities and short‑term bridging can proceed without a signed lease, but this tends to be costlier or include additional conditions. A signed lease improves pricing and reduces lender conditions.

Will lenders contact my landlord?

Often yes: lenders or their solicitors will contact the landlord to confirm lease terms, landlord consent and to agree any charge or notice arrangements.

When do lenders need landlord consent?

Landlord consent (Licence to Alter) is usually required before major works start and often before drawdown for long‑term, secured financing.

If I only have heads of terms, can I still get an indicative quote?

Yes — detailed HoTs plus contractor quotations are commonly sufficient for a conditional or indicative offer from many specialist lenders and brokers.

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Final summary — straightforward steps to get started

Short answer: start with clear heads of terms and contractor quotes to obtain an indicative or conditional offer. Expect mainstream or property‑secured lenders to require a signed lease and landlord consents before drawdown. If speed or flexibility is essential, asset finance or bridging may be alternatives, but often at higher cost.

Next step: complete our simple enquiry to get matched quickly with lenders or brokers who specialise in fit‑out projects.

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Compliance & transparency

UK Business Loans is an introducer that connects businesses with lenders and brokers. We do not lend money or provide regulated financial advice. Submitting an enquiry does not affect your credit score. We aim to provide clear, fair and not‑misleading information so you can make an informed decision.

Written by the UK Business Loans team — Last updated: 2025-10-30