Quick answer
Commercial and retail leases usually require security before you get the keys — a cash bond or a bank guarantee, often several months of rent — plus advance rent and fit-out deposits. business.gov.au lists deposit, advance rent and fit-out as the upfront costs of leasing. Business funding can cover these when timing is tight; the deadline is the date the lease or agreement for lease requires the security.
Key points
- Upfront leasing costs include deposit, advance rent and fit-out, according to business.gov.au.
- Lease security is commonly a cash bond or a bank guarantee — the lease says which and how much.
- A bank guarantee ties up cash or security with your bank rather than paying it to the landlord.
- The deadline is in the lease or agreement for lease — usually before handover.
- Deadline
- Date set in the lease
- Typical items
- Bond or guarantee · advance rent · fit-out
- Unsecured range
- Typically $5k – $500k
- Secured range
- $20k – $5m
You’ve found the right site — a second shop, a bigger warehouse, a clinic in the right suburb. The landlord is keen, the heads of agreement are signed, and then the lease arrives: a bank guarantee equal to several months’ rent, two months’ rent in advance, and the fit-out starting at handover.
Opening a new site is one of the most predictable cash crunches in business, and one of the most deadline-driven. This page is about funding the upfront costs so the keys arrive on time.
What does a new lease cost up front?
business.gov.au lists the upfront costs of leasing as deposit, advance rent and fit-out. In practice, a new lease can bring:
- Security — a cash bond or bank guarantee, often a few months of rent plus GST
- Advance rent — the first month or two before you trade
- Fit-out deposits — builder, shopfitter, signage, equipment
- Legal costs — your lawyer’s review, sometimes a contribution to the landlord’s costs
- Outgoings — rates, insurance and building costs passed through under the lease
Add them up before you sign. The total is often double what owners expect when they first see the rent figure.
Bond or bank guarantee — what’s the difference?
| Cash bond | Bank guarantee | |
|---|---|---|
| What you hand over | Cash to the landlord (or held under state rules for retail leases) | A guarantee from your bank to the landlord |
| What it ties up | The cash itself | Cash or security held by your bank against the guarantee |
| When it’s returned | At the end of the lease, subject to the lease terms | Released when the landlord returns it |
| Speed to arrange | Fast if you have the cash | Depends on your bank’s process |
Ask your bank early what it needs to issue a guarantee and how long it takes. Funding can provide the cash or security that sits behind the guarantee, or pay a cash bond directly.
What’s realistic by timeline?
- Handover in days: property-secured funding of $20k – $250k is possible the same day where the security is simple; up to $5m possible within 24–48 hours.
- Handover in a few weeks: unsecured cash-flow funding for trading businesses, typically $5k – $500k, or a secured facility covering security, advance rent and fit-out.
- Handover in a few months: time to plan the whole opening budget, including how long the new site will take to pay its way.
When you have the lease figures, send your enquiry or ring 1300 752 188.
What to have ready when you call
- The lease or agreement for lease, showing the security amount, form and due date — see proof of the deadline.
- Your full opening budget: security, advance rent, fit-out and equipment.
- Your existing business’s bank statements and ABN or ACN.
- Who’s signing the lease and whether personal guarantees are required — see who needs to sign.
- Property details if you’d use security for a larger facility.
- How the new site pays its way — expected trading and when it breaks even.
How long until the new site pays for itself?
This is the question that decides how to fund a lease. Security and fit-out are paid on day one; the new site’s revenue builds over months. If the existing business can comfortably carry the new site through its ramp-up, a shorter facility repaid from overall trading may suit. If the new site needs a longer runway, plan for that from the start — a facility that has to be repaid before the new site is busy only moves the deadline.
Can you negotiate the security down?
Often. Landlords are usually more flexible than the first draft of a lease suggests. Things to ask about:
- a lower security amount, or a reduction after a year of on-time rent
- a rent-free period or fit-out contribution, which frees up cash
- staged security — part at signing, the rest at trading commencement
- accepting a bank guarantee instead of cash, or vice versa, whichever suits you
Your lawyer can advise on what’s usual in your state and sector.
What if the existing business is already stretched?
Then slow down before signing. A second site doubles some risks before it doubles revenue: two rents, two sets of outgoings, staff split across locations. Before committing, check that the first site’s cash flow can carry the new one for at least the ramp-up period you expect, plus a margin. If it can’t, the answer may be a longer fit-out timeline, a smaller first stage, or a landlord incentive that reduces the upfront spend — rather than a bigger loan. Funding works best when it bridges a timing gap you can see the end of, not when it props up a site that hasn’t proved itself.
An illustrative new site
Illustrative example only. A gym operator signs for a second site with handover in five weeks. The lease requires a bank guarantee of about $45k, two months’ rent in advance of roughly $24k, and the fit-out builder wants a $60k deposit. The total upfront is just under $130k, while the first site generates steady cash but not that much spare.
The operator’s bank will issue the guarantee against cash security. A secured facility over the operator’s home provides the security cash and covers the fit-out deposit, and is repaid over 18 months as the new site’s memberships build.
Get the keys on time
A new site is a growth moment — don’t let the security deadline hold it up. Ringing the Deadline Desk involves no credit check, and we don’t distribute your details across a line of lenders. A real person looks at your lease figures and calls you back.
Please be accurate on the enquiry form: the total upfront cost, the handover date and how the new site will trade. That’s how we match you to funding that’s ready before the landlord needs it. Or ring 1300 752 188.
How it works, step by step
- 1
Heads of agreement
Confirm the security amount, form and due date, plus advance rent and fit-out obligations.
- 2
Before signing
Ask your bank what it needs to issue a guarantee, if that's the required form.
- 3
Two weeks before handover
Ring or enquire. Arrange funding for the security and upfront costs.
- 4
Handover
Security lodged, keys collected, fit-out under way.
Frequently asked questions
What's the difference between a lease bond and a bank guarantee?
A bond is cash paid to the landlord (or held under your state's retail leasing rules). A bank guarantee is a promise from your bank to pay the landlord up to a set amount if you default; the bank usually holds cash or security from you against it.
Can I borrow to pay a commercial lease bond?
Yes. Lease security, advance rent and fit-out are common business purposes for funding, especially when a new site is opening on a fixed date.
How much is a typical commercial lease bond?
It varies by lease and landlord. Several months of rent is common, but the amount is negotiable and set out in the lease.
Should I fund the fit-out too?
If the fit-out has to start at handover, it makes sense to plan the whole opening budget together. Fit-out deposits are often due before the business earns anything at the new site.