Your lease ends soon: can you still get an unsecured business loan?

You can usually still get an unsecured business loan when your lease is ending, but the lender will almost certainly ask about it. If your takings depend on the site, a lease that runs out before the loan does is a genuine risk. An exercised option, a written renewal offer, or a loan term that finishes comfortably inside the lease normally settles the question.

It’s one of those details owners don’t expect. You’re applying on the strength of your trading, not your premises, so why does the lease matter? The answer is simple: for a shop, café, clinic, gym or workshop, the trading is the premises. This guide covers how lenders think about it and how to answer before they ask.

Why does a lease come into an unsecured loan at all?

An unsecured business loan is repaid from what the business earns. When customers come to you, those earnings are tied to a location: the foot traffic, the fit-out, the signage, the address in your customers’ phones. If you lost the site, the takings that repay the loan could fall away, at least for a while.

That’s why business.gov.au’s guide to applying for a business loan lists lease agreements among the documents you may need. For a lender, the lease answers a simple question: will this business still be trading here when the last repayment is due?

The concern is strongest when:

• the lease ends within the proposed loan term;
• there’s no option to renew, or the option window has passed;
• the business is on a month-to-month tenancy;
• the business would be hard to move, for example because of a heavy fit-out or licensing tied to the site.

How do options to renew work, and when should you act?

Many commercial and retail leases include an option to renew: a right for the tenant to extend for a further term. Options aren’t automatic, and they usually have to be exercised in a specific way within a specific window.

The Queensland Small Business Commissioner’s fact sheet on options to renew is a good example of how strict this can be. It says options typically need to be exercised between three and six months before the lease ends, suggests thinking about the option six to twelve months ahead, and warns that failing to exercise it in strict accordance with the lease can cost you the right to renew. Rules differ between states and between retail and other commercial leases, so check what applies to yours.

For loan purposes, an option exercised properly is the strongest evidence you can offer. It turns “the lease ends in five months” into “the lease runs for another five years”.

What if you’re holding over month to month?

Plenty of businesses keep trading after a lease ends without signing a new one. In New South Wales, for example, the NSW Small Business Commission explains on its page about the end of a lease that a tenant may be able to stay on a month-to-month basis, and that either party can then end the arrangement with one month’s notice. It also notes that staying month to month without negotiating a new fixed term can be risky.

A lender sees the same risk. A month-to-month tenancy doesn’t stop you borrowing, but it usually means:

• more questions about your relationship with the landlord and how long you’ve been at the site;
• a preference for a shorter loan term;
• sometimes a smaller amount than your turnover alone might support.

If you’re holding over and a new lease is genuinely in the works, send whatever written correspondence you have: the landlord’s offer, heads of agreement, or emails confirming terms are being drafted.

How does lease status change what lenders ask for?

Here’s a rough guide to how lenders tend to read different lease positions. It varies by lender and by how site-dependent your business is.

Your lease position	How it usually reads	What helps
Several years left on the term	No concern	A copy of the lease, or its key dates
Ends within the loan term, option available	Some concern until exercised	Proof the option has been exercised, or your plan and timing to do so
Ends within the loan term, no option	Real concern	Landlord’s written renewal offer, or a shorter loan term
Month-to-month holding over	Treated as short-term	Long history at the site, landlord correspondence, shorter term
Moving to new premises	Depends on the plan	Signed new lease, moving budget, timeline

Wondering how your own lease position would read? Send us a 60-second enquiry and mention the lease dates. A real person will tell you what a lender is likely to ask.

What’s the simplest fix if the lease is short?

Match the loan to the lease. If your lease has 18 months to run and no option, a 12-month short-term business loan that’s fully repaid well before the lease ends removes most of the concern. The repayments will be higher than on a longer term, so run them against your quietest month first.

Other practical moves:

• Exercise your option before applying, if you were planning to anyway.
• Ask the landlord for a letter confirming they intend to offer a new lease and on roughly what terms.
• Borrow less now, then come back once the new lease is signed.
• Consider property security if you own real estate and need a longer term than the lease allows. Property-secured options run from $20k to $5m and rely on the property, not the site.

Franchisees have an extra layer to think about, because the franchise agreement and the lease often run on separate clocks, and a lender will want both to outlast the loan. Our guide to cash flow loans for franchisees covers that in more detail.

Whatever route you take, write the key dates down in one place before you apply: lease start and end, option window, any landlord deadlines, and the loan’s proposed final repayment. Seeing them side by side makes it obvious whether there’s a gap, and it gives the lender a one-glance answer to the question they’re going to ask anyway.

What if the loan is for the move itself?

Sometimes the lease is ending because you’re leaving. A bigger site, a better location or a landlord who won’t renew can all trigger a move, and moves cost money: bond or bank guarantee, rent in advance, fit-out, signage, downtime.

That’s a perfectly normal reason to borrow. The lender will want a signed lease or a firm offer for the new site, a budget, and a sense of whether your customers will follow you. A clinic moving two streets away is a different risk from a café relocating to a new suburb. Our fit-out finance page covers the building side, and the retail shop loan page looks at how lenders view shopfront businesses more broadly.

A worked example

Illustrative. A retail homewares store has traded from the same strip-shop for eight years. The current lease ends in seven months, with an option for a further five years that must be exercised between three and six months before expiry. The owner wants $50k unsecured to stock up for Christmas and refresh the shop.

On the first call, the lease dates raise a flag: a 12-month loan would outlast the current term. The owner, who intended to stay, waits four weeks until the option window opens, exercises the option by written notice exactly as the lease requires, and gets the landlord’s written acknowledgement.

The application then goes in with twelve months of statements, recent BAS and the option paperwork. The lease question disappears, and the lender assesses the loan purely on trading, which is what the owner wanted in the first place.

Lease sorted, or nearly? Let’s look at your options

Thinking about your lease before a lender does puts you a step ahead, and it’s exactly the kind of detail we like to talk through early. Unsecured and cash-flow options typically run from $5k to $500k, sized on your turnover, with property-secured options available if a longer term makes more sense.

The enquiry takes about a minute, and there’s no credit check when you first enquire. We don’t pass your details around to multiple lenders, so there’s no barrage of calls. One of our team reads what you send, including your lease dates, and calls to talk through what’s realistic. The more accurately you fill in the form, the faster we can point you to an option that suits both your trading and your premises.

See if you qualify today →