Make-good at the end of your lease: what you owe, what it costs and how to fund it without property

Most tenants think about make-good twice: once when they skim the clause before signing, and again when the landlord’s letter arrives a few months before the lease ends. The second time is usually a shock. The fit-out you paid to put in now has to come out, the walls need patching, and the bond you handed over years ago won’t come back until someone signs off on the work.

This guide is for owners in exactly that spot, especially those without property to borrow against. Here’s how to work out what you really owe, how to make the bill smaller, and how to fund the gap between paying for the works and getting your security back.

What does “make-good” actually mean?

Make-good is your obligation, under the lease, to hand the premises back in a set condition. That condition is whatever the clause says. It might be the bare shell you moved into, the condition at the start of your lease, or simply clean and in good repair.

The Victorian Small Business Commission’s end-of-lease guidance lists the usual suspects: removing fit-out, repairing damage beyond normal wear, painting, taking up flooring, removing signs, fixing windows, removing partitions and cleaning. Business Queensland’s ending a lease page, updated in August 2025, describes the general expectation as returning the premises to the condition they were in when the lease started.

Two things follow from that:

• The lease sets the standard. A landlord can ask for more, but you’re only obliged to deliver what you signed up to.
• What was there before you matters. If you took over a space with an old fit-out still in it, you may not have to strip it back to bare concrete. Your entry condition report and photos are the evidence.

How much does make-good cost?

There’s no standard figure, and anyone quoting one without seeing your lease and premises is guessing. Cost is driven by:

Driver	Why it moves the bill
Wording of the clause	“Original condition” can mean stripping everything; “good repair” may mean paint and a clean
Type of fit-out	Wet areas, commercial kitchens, cool rooms and salons with plumbing cost more to remove and cap
Size of the space	Painting, flooring and ceilings scale with square metres
Services	Electrical, data, gas and plumbing must be safely disconnected and capped by licensed trades
Shopping centre rules	Centres often have their own contractors, hours and approval steps
Timing	A rushed job in the final fortnight costs more than one planned months ahead

The practical move is to get two or three written quotes, each priced against the actual clause, at least three to six months before you leave. That gives you a real number to plan around, and something to negotiate with.

How can you shrink the make-good bill?

Plenty of make-good bills can be reduced, but only if you start early. Here’s a checklist that works:

1. Read the clause with fresh eyes. Better still, have your lawyer read it. Note exactly what condition is required and whether there’s any reference to an entry condition report.
2. Find your entry evidence. Condition reports, photos, emails about the space when you took it over.
3. Ask the landlord for a written scope. The WA Small Business Development Corporation’s make-good tips suggest asking for written confirmation about the changes you’ve made and giving the landlord a date to respond by.
4. Ask whether anything can stay. If a new tenant is coming in, they may want the shelving, the partitions or the kitchen extraction. Each item left in place is an item you don’t pay to remove.
5. Ask about a payment instead of works. Landlords planning a refurbishment sometimes prefer a negotiated cash amount to a half-done strip-out. Put any deal in writing.
6. Confirm who signs off. Agent or landlord? Get the name, and get the final approval in writing before you hand back the keys.

If you’re stuck, the small business commissioner in your state is a good first call. In WA, the SBDC offers free commercial tenancy advice on 133 140.

Why does the timing hurt cash flow?

This is the part that catches movers out. Make-good is paid before your security comes back, and often while you’re paying for the new site too.

Picture the order of events:

• You pay the builders to strip and repair the old premises.
• You’re still paying rent on the old site until the lease ends.
• You’ve signed the new lease, so there’s a new bond or bank guarantee, plus rent at the new site.
• You’re fitting out the new site.
• Only after the old landlord inspects and signs off does the old bond or bank guarantee come back.

On the bond, Victoria is the clearest example: under its retail leases legislation, the VSBC explains that the landlord has 30 days to give back the deposit and interest earned, as long as you’ve met your obligations. Queensland’s guidance notes there’s no legislated holding requirement for commercial deposits unless a licensed agent holds them, so the lease wording decides more. Either way, the money arrives weeks after you’ve spent it.

Don’t be tempted to finish the job after you’ve moved out. The WA SBDC warns that works carried out after the lease ends can lead to disputes about when the lease actually finished, and extra rent while the landlord waits to re-let. Business Queensland adds that staying on without agreement could leave you owing rent.

If you’re already juggling the numbers, a quick enquiry about bridging the move costs you nothing and doesn’t touch your credit file.

How can a tenant fund make-good without property?

Make-good doesn’t leave you with an asset. There’s nothing for equipment finance to secure, and the landlord won’t let a lender register an interest over walls you’ve just repainted. So it’s a cash-flow job, which is exactly what unsecured funding is built for.

Option	How it fits make-good	Watch out for
Business line of credit	Draw for the works, then pay it down when the old bond or guarantee is released	Discipline: the limit is only useful if it’s cleared after the move
Unsecured working capital	A lump sum covering make-good plus the overlap rent at both sites	Fixed repayments start straight away, during your busiest cash month
Equipment finance	Not for the make-good itself, but frees cash by funding removable gear at the new site	Only suits items a lender can identify and value
Landlord negotiation	A cash-in-lieu deal or items left in place shrink what you borrow	Needs time, so start months out

The line of credit is often the neatest match, because the need is temporary and you know where the repayment is coming from. Unsecured facilities typically run from $5,000 to $500,000, sized on turnover and what your bank statements show. You can test a rough range with the unsecured borrowing estimator.

Be realistic about what “unsecured” still means. You’ll usually sign a director guarantee, and some lenders take a general security agreement over business assets. No property is involved, but it isn’t a free pass either. The lender will also look at whether the business can afford the new site’s rent alongside the repayments, so have your new lease terms handy.

What if the business is closing, not moving?

Here’s the honest limit. An unsecured lender is repaid from future trading. If the make-good is the last act of a business that’s winding up, there’s no future trading to lend against, and most lenders won’t help.

In that case, the most useful steps are:

• Talk to the landlord early about a negotiated exit, including cash in lieu or leaving items in place.
• Ask your accountant to map out the order of payments, including staff, the ATO and suppliers.
• Use your state small business commissioner if the scope or bond release is in dispute.

If you’re consolidating to a smaller site or going home-based rather than closing, that’s different. A business that keeps trading can still be funded, and our page on home-based and online businesses covers how lenders look at that next chapter.

A worked example (illustrative)

A hypothetical hair salon in a suburban strip has five weeks left on its lease and is moving to a bigger space two streets away. The make-good clause requires the premises to be returned to their condition at lease start.

• The problem: quotes to remove basins, cap plumbing, take out the reception joinery, patch, paint and replace flooring come in at $34,000. The old bond won’t be released until sign-off.
• The negotiation: the incoming tenant is a beauty clinic that wants the plumbing points and two partitions. The landlord agrees in writing that those stay. Revised quote: $22,000.
• The new site: a new bond, a fit-out and three weeks of overlapping rent.
• The funding: new styling chairs and dryers go on equipment finance. The owner draws on a line of credit for the make-good and overlap rent, then pays most of it down when the old bond comes back about a month after handover.

No property is involved, and the borrowing has a clear end point. All figures are illustrative.

Moving on? Let’s make the exit the easy part

A good move shouldn’t be soured by the bill for the place you’re leaving. We talk to tenants about make-good, overlap rent and bond timing regularly, and we’d rather help you plan it months ahead than in the final week.

Asking costs you a minute and leaves your credit file as it is; a check only happens if you decide to go ahead. Your details stay with us rather than being passed around a panel of lenders, so you won’t be fielding calls from strangers. A specialist reads your situation, including both leases, and rings you to talk it through. When you fill in the form, give your real turnover, existing repayments and the make-good quote you’re working with. Accurate numbers mean the first option we put in front of you is one that fits.

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