Which finance to expand or fit out premises

2 min read

Property vs fit-outSplit the costs

Right tool per costThe method

Don't over-secureThe pitfall

Split the project by cost type

Expanding premises is rarely one cost — it is property (buy or lease), fit-out (building work, furniture), equipment, and the working capital to trade from the new space. Each suits a different tool. Funding the whole lot with one long-term secured facility over-secures the short-lived costs; funding a property purchase with a short-term loan under-funds it. Split the project and match finance to each part. See commercial mortgage vs a loan.

The right tool per cost

Cost	Best finance
Buying the property	Commercial mortgage
Fit-out / refurbishment	Short-term business loan
Equipment	Asset finance or a loan
Working capital for the new space	Short-term loan or revolving line

A short-term loan is well suited to the fit-out and refurbishment — a defined cost, repaid over a sensible term as the expanded space starts earning. See asset finance vs a loan for the equipment element.

Fund the trading gap too

A common oversight: funding the build but not the working capital the enlarged operation needs to trade from day one. Build in a buffer — a short-term facility — so the expanded business is not cash-starved the moment it opens. Check the whole project's affordability with our affordability guide.

The Credicorp view

For the fit-out, refurbishment, equipment and day-one working capital of a premises expansion, a short-term Credicorp business loan or Credicorp Flex line fits — cash to spend across the project, no charge over the property, no personal guarantee. For the property purchase itself, a commercial mortgage. Register to apply. Educational content, not financial advice.

Frequently asked questions

What finance should I use to fit out premises?

A short-term business loan suits the fit-out and refurbishment well — a defined cost repaid over a sensible term as the expanded space starts earning. Buying the property is a commercial mortgage job, equipment can use asset finance or a loan, and working capital for the new space suits a loan or revolving line.

Should I fund a premises expansion with one facility?

Usually not. An expansion blends property, fit-out, equipment and working-capital costs, each suited to a different tool. Funding it all with one long-term secured facility over-secures the short-lived costs. Splitting the project and matching finance to each part keeps the cost right.

What's the common mistake when expanding premises?

Funding the build but not the working capital the enlarged operation needs to trade from day one, leaving it cash-starved the moment it opens. Build in a buffer, such as a short-term facility, and check the whole project's affordability rather than just the build cost.