Fit‑Out Finance: Typical Interest Rates & Common Fees

Quick summary: Fit‑out finance (for shops, offices, restaurants and other commercial premises) carries a wide range of interest rates and fees depending on structure, security, lender type and borrower profile. Typical headline annual rates range from around 3.5% for low‑LTV commercial mortgage top‑ups and some asset finance deals, up to double‑digit rates (7%–30%+) for unsecured or higher‑risk lending. Short‑term revenue‑based products can carry equivalent APRs of 30%–100%+. Common fees include arrangement fees (0.5%–3%), valuation and legal costs (£100–£2,000), monthly servicing fees and possible early repayment charges. To compare tailored offers quickly, get a Free Eligibility Check and compare quotes from specialist brokers and lenders. Get Quote Now — Free Eligibility Check

What is fit‑out finance and how lenders structure it

Fit‑out finance covers funding for refurbishing or equipping commercial premises — for example shop refits, restaurant kitchens and dining areas, office renovations, or outlet refurbishments. Lenders and brokers structure funding in several ways to suit the cost profile and the assets being bought or improved.

• Secured business loans / commercial mortgage top‑ups: Larger projects may be added to a mortgage or funded with a loan secured on property, usually offering lower rates for firms with suitable security.
• Asset finance / hire purchase: Suitable for equipment and fixtures; the asset itself acts as security.
• Unsecured business loans: Faster but costlier — no property pledge required.
• Lease facilities: For furniture and fit‑out elements; can preserve cashflow.
• Invoice finance or short‑term working capital: Can be used alongside fit‑out finance to smooth cashflow while works complete.
• Merchant cash advance / revenue‑based finance: Repayments tied to card takings — quick but often expensive.

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Typical interest rates you might see for fit‑out finance

Why rates vary

Rates depend on several factors: the finance type, whether the loan is secured, the borrower’s credit profile and time in business, annual turnover, loan amount and term, the industry risk (hospitality and leisure commonly attract higher margins), and whether personal guarantees or property security are offered. Lenders also price for speed — fast short‑term offers often cost more.

Indicative rate bands (for guidance only)

These ranges are illustrative — always compare quotes and ask for a full cost illustration (APR or total cost example).

• Commercial mortgage top‑ups / property‑secured long term loans: roughly 3.5%–7.5% p.a. (fixed or variable). Lower rates are available where the property and borrower profile are strong.
• Secured business loans (property or large asset security): typically 6%–12% p.a., depending on term and lender.
• Unsecured business loans: often 7%–30%+ p.a. — the higher your risk profile, the higher the rate.
• Asset finance / hire purchase: typically 4%–15% p.a., influenced by asset age, term and supplier agreements.
• Merchant cash advance / revenue‑based finance: effectively very high cost. Equivalent APRs can be 30%–100%+ because repayments are front‑loaded against daily/weekly card income.
• Invoice finance: fees often 0.5%–3% of invoice value plus interest on the drawn advance (rates vary by debtor risk).

Fees commonly charged with fit‑out finance

Beyond the interest rate, fees can materially affect the total cost. Typical fees include:

• Arrangement / booking fee: often 0.5%–3% of the facility value (sometimes a flat fee).
• Valuation / survey fees: one‑off charges for property or asset valuation — typically £100–£1,000 (higher for commercial property surveys).
• Legal fees: lenders’ legal costs on secured deals — often £500–£2,000 depending on complexity.
• Broker fees: some brokers charge a fee for arranging complex deals; others earn commission from lenders. Always ask up front.
• Monthly account or servicing fees: e.g., £10–£50 per month for facility administration.
• Early repayment charges / exit fees: can be a percentage of outstanding balance or fixed; check before signing.
• Commitment fees: for undrawn portions of a facility (occasionally applied).
• Default / late payment fees: applicable if repayments are missed — usually higher than standard interest.

Be alert to “packaged” deals where fees are rolled into the loan: this increases the borrowing amount and the total interest paid. Always request a total cost example (APR) and an itemised fee schedule before agreeing any offer.

Quick comparison — indicative only

Finance type	Typical rate (indicative)	Common fees	Best for
Secured loan / mortgage top‑up	3.5%–7.5% p.a.	Valuation, legal, arrangement	Large fit‑outs with property security
Unsecured business loan	7%–30%+ p.a.	Arrangement, monthly servicing	Smaller projects without security
Hire purchase / asset finance	4%–15% p.a.	Documentation, administration	Equipment, kitchen plant, fixtures
Merchant cash advance	Equivalent APR 30%–100%+	Factor fee / retrieval fee	Urgent short‑term cashflow, high card sales
Invoice finance	Advance interest + fees 0.5%–3%	Service fee, discount fee	SMEs with invoice receivables

How interest is calculated and expressed

Interest may be shown as a nominal rate (the bank rate quoted) or as an APR (annual percentage rate) which incorporates many fees and is a better measure of total cost. Some short‑term lenders quote daily rates or factor fees; merchant cash advances are repaid as a percentage of turnover so APR comparisons can be misleading but still useful when converted to total cost. Ask lenders for the APR or a total cost example and a repayment schedule in writing.

Example scenarios (indicative)

1. Small cafe fit‑out — £25,000 unsecured loan: rate 12% p.a., arrangement fee 2% (£500). Monthly repayments over 3 years — indicative only. Total cost will include fee and interest. For precise figures request a quote.
2. Retail shop refurbishment — £100,000 secured loan: rate 6.5% p.a., valuation £500, legal £1,200. Lower monthly cost due to security and longer term.
3. Restaurant kitchen equipment — £40,000 hire purchase: rate 8% p.a. over 5 years; equipment acts as security so no property charge.

Actual offers vary by lender and underwriting. For tailored comparisons from our panel (minimum finance typically from £10,000 upwards), Get Quote Now — Free Eligibility Check.

How UK Business Loans helps you get the best rates and manage fees

We are an introducer that connects your business with specialist lenders and brokers who understand fit‑out finance for retail, hospitality and offices. Our process is quick and free:

1. Complete a short enquiry (takes minutes).
2. We match you to lenders/brokers suited to your sector and project size.
3. You receive quotes and can compare rates, fees and terms — no obligation.

We don’t provide loans or regulated financial advice — we introduce you to providers who can. Our partners cover typical deals from around £10,000 and up, including asset finance, secured loans and specialised commercial lenders. If you want specific information about funding a fit‑out, including supplier finance, see our guide to fit‑out finance for more detail.

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Practical tips to reduce your rate and fees

• Prepare complete financials and contractor quotes — stronger documentation improves offers.
• Consider providing security (property or assets) to access lower rates.
• Lengthen the term to reduce monthly repayments — but compare total interest costs.
• Negotiate arrangement and legal fees; ask for capped costs or fee waivers.
• Compare offers from multiple lenders and brokers — rates and fee structures differ widely.
• Ask for a full APR/Total Cost Illustration and an itemised fee schedule before you sign.

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Frequently asked questions

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Important: This page provides general information only and is not regulated financial advice. UK Business Loans is an introducer — we don’t lend or provide regulated advice. Completing an enquiry shares your details with selected lenders and brokers in our network so they can provide quotes; you are under no obligation to proceed.

Content by UK Business Loans — finance introducer with national lender network. Date: 30 October 2025.

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For an in‑depth overview of the product types commonly used for premises improvements, read our dedicated guide to fit‑out finance.

1. What is fit‑out finance and what types of loans are available for shop, office or restaurant refurbishments?
Fit‑out finance funds commercial refurbishments and can include commercial mortgage top‑ups, secured business loans, asset finance/hire purchase, unsecured business loans, lease facilities, invoice finance and merchant cash advances.

2. What interest rates can I expect for fit‑out finance in the UK?
Typical headline rates vary widely—from around 3.5%–7.5% p.a. for property‑secured deals up to 7%–30%+ for unsecured loans, with merchant cash advances carrying equivalent APRs often between 30%–100%+.

3. What’s the difference between secured and unsecured business loans for a fit‑out?
Secured loans (e.g., mortgage top‑ups or asset security) normally offer lower interest and longer terms in exchange for collateral, while unsecured loans are quicker but usually more expensive and carry higher rates.

4. Which fees should I check before taking out fit‑out finance?
Common fees include arrangement/booking fees (0.5%–3%), valuation and survey costs (£100–£2,000), lenders’ legal fees (£500–£2,000), monthly servicing charges, commitment or early repayment fees and possible broker fees.

5. Can my business get fit‑out finance if it has poor credit or is a start‑up?
Yes—some specialist lenders and brokers work with start‑ups and businesses with imperfect credit, though rates and terms will reflect higher perceived risk.

6. How quickly can I get a quote and a formal offer for fit‑out funding?
You can often receive an initial response within hours after an enquiry, but formal lender offers typically take several days to weeks depending on valuations, legal checks and underwriting.

7. Should I compare APRs or headline interest rates when assessing fit‑out finance?
Always compare APRs or a total cost illustration because APRs include many fees and give a clearer picture of the true cost than headline rates alone.

8. Is asset finance or hire purchase a good option for buying kitchen plant, fixtures or equipment?
Yes—asset finance and hire purchase are well suited to equipment and fixtures because the asset usually acts as security and can offer competitive rates versus unsecured borrowing.

9. How can I reduce the rate and fees on a fit‑out loan?
Improve documentation, provide security (property or assets), lengthen the term where appropriate, negotiate or shop around for fee waivers, and compare offers from multiple lenders or brokers.

10. If I submit an enquiry through UK Business Loans, am I making a formal loan application or obliged to accept offers?
No—the enquiry is a free matching step (not a formal application), does not obligate you to proceed, and is used only to connect you with suitable lenders and brokers.