Quick answer
A fit-out or second location needs cash well before it earns: lease bond or bank guarantee, fit-out, equipment, opening stock, staff training and a buffer for the ramp-up months. Budget every cost, add a contingency, keep the existing site's working capital intact, and fund the gap with a short-term loan, a cash line or property-backed cash from $20,000 to $5,000,000.
Key points
- Costs arrive months before the new site earns.
- Don't drain the first site's working capital to open the second.
- Budget a contingency for fit-out overruns and slow ramp-up.
- Property-backed cash suits larger expansions.
- Unsecured
- Typically $5k – $500k
- Property-backed
- $20k – $5m
- Plan for
- Bond, fit-out, stock, ramp-up
- Enquiry
- About 60 seconds
Your first site is humming. The landlord next suburb over has the perfect shopfront. Or the existing space needs a refit to keep up. Either way, you’re about to spend a lot of money before the new space earns any.
What does opening day really cost?
| Cost | When it’s paid | Notes |
|---|---|---|
| Lease bond or bank guarantee | At signing | Often several months’ rent |
| Legal and lease costs | At signing | Lease review, incoming fees |
| Fit-out | Progress payments over weeks | The biggest and most variable item |
| Equipment and fixtures | Before opening | Some can be financed separately |
| Signage and branding | Before opening | Council approval may be needed |
| Opening stock | Before opening | Paid before a single sale |
| Staff hiring and training | Weeks before opening | Wages before revenue |
| Launch marketing | Around opening | See cash for a marketing push |
| Ramp-up buffer | First months of trading | New sites rarely break even straight away |
business.gov.au recommends building a budget before committing. For an expansion, build two: one for the costs up to opening day, and one for the first six months of trading.
Protect the first site
The most common expansion mistake isn’t the fit-out going over budget. It’s draining the original business’s working capital to cover it, so both sites end up short. Keep the first site’s cash buffer separate and fund the new one on its own terms. The growth cash gap page explains why growth needs its own cash.
Signing a lease soon? Tell us about the new site and we’ll look at funding the costs before opening day.
How do you fund a fit-out or new site?
- Short-term cash loan. For a smaller fit-out or refit with a clear budget. See short-term business loans.
- Business cash line. Useful for progress payments that arrive at unpredictable times, and for the ramp-up months.
- Property-backed cash. For larger expansions, from $20k to $5m. Interest can often be prepaid or added, so the new site isn’t carrying repayments before it trades. See property-backed cash.
- Equipment finance. For big-ticket fixed equipment, alongside cash for everything else.
Lenders will want to understand the new site’s numbers: the lease, the budget, expected trade and how the existing business performs.
Questions to answer before you sign
- How long until the new site covers its own costs? Be conservative.
- What happens if the fit-out runs six weeks late? You may be paying rent with no revenue.
- Can the existing site carry the business through a slow start?
- Is there a contingency? For both cost and time.
- Who’s running each site? Management stretch is a hidden cost.
Our cash runway guide helps you work out how many weeks of costs the business can cover if the ramp-up takes longer than planned.
Refit versus a second site: different cash shapes
The two look similar on paper, but the cash behaves differently.
A refit of your existing site may mean closing for days or weeks, so income drops while costs peak. Plan the work for your quietest period, keep staff hours in mind, and fund enough to cover the closure as well as the builders. Once you reopen, the refreshed site should lift trade fairly quickly.
A second site keeps your first site trading, which helps, but adds a whole new set of fixed costs that start before the doors open and continue through a ramp-up period. The cash need is longer, even if the fit-out cost is similar.
| Refit | Second site | |
|---|---|---|
| Income during works | Drops or stops | First site keeps trading |
| Duration of cash need | Weeks | Months |
| Biggest risk | Overrun extends the closure | Slow ramp-up |
| Typical funding shape | Short-term loan | Loan plus a cash line or buffer |
Bank guarantee or cash bond?
Many landlords ask for a security deposit or a bank guarantee. A cash bond takes money straight out of your working capital. A bank guarantee can tie up cash too, because banks often require funds or security behind it. Ask the landlord which they’ll accept, and include it in your funding plan from the start.
An illustrative example
Illustrative only. A Canberra café owner signs a lease on a second site. The budget is $185k for bond, fit-out, equipment and opening stock, plus a $40k ramp-up buffer. She funds the equipment through equipment finance and uses a property-backed loan secured on her home for the rest, with interest prepaid for the first year so the new café isn’t carrying repayments while it builds a customer base.
Open the doors with confidence
Expansion is exciting, and it deserves funding that doesn’t squeeze your existing business. Tell us about the new site or refit. The enquiry takes about 60 seconds, there’s no credit check when you first ask, and your details stay with us rather than being sprayed around the market. A real person looks at your plans and calls to talk them through.
Please be accurate about the budget, your current turnover and any property you own. It helps us shape the right package from the start.
Frequently asked questions
What costs come with opening a second location?
Lease bond or bank guarantee, legal fees, fit-out, equipment, signage, opening stock, staff hiring and training, marketing for the launch and a cash buffer for the months before the site breaks even.
Can I fund a fit-out without property?
Often, if your existing business has steady deposits. Unsecured cash is sized on turnover and bank statements. Larger fit-outs may need property security or a mix of funding.
How much contingency should I allow for a fit-out?
Fit-outs commonly run over budget and over time. Many owners add a meaningful contingency for both cost and delay, and keep it separate from trading cash.
Should I use equipment finance for the fit-out?
Equipment finance can suit big-ticket items such as ovens or machinery. Building works, bonds and opening stock usually need cash, so many expansions use a mix.