Finance for hospitality and retail businesses
From fitting out a venue to covering the gap between quiet and busy weeks to buying the business next door, what gets funded comes down to the asset, the usage and your bank statements.
General information only
Hospitality and retail businesses touch almost every finance type we broker: fitting out a venue, financing the equipment inside it, covering cash flow between busy and quiet periods, and sometimes buying an existing business outright.
What’s different in this sector is how much detail lenders want on the specific asset and how it’s used, not just the industry label.
Fit-out finance, including the soft costs
Fit-out finance is common in this sector and available outside the major banks. On some products you can fund soft costs too: painting, wiring, work that can’t be removed or repossessed if the deal ever went wrong. That’s a meaningful difference from asset finance in other industries, where the lender’s security is usually a physical, removable item.
A deal Andrew worked on before starting Ecommerce Loans. A group running several bars and pubs in Sydney had just signed a five-plus-five lease on a new site and needed to fit it out. ATO debt across its trading entities ruled out the major banks. The fit-out was approved at $750,000 over five years. The same lender also gave conditional approval for a further $200,000 to pay out the ATO debt, once the first few months of repayments were clean. The structure was built for the next step: clear the ATO debt, build a clean record, and put the business in front of a major bank within one to two years.
Why leasing beats a chattel mortgage for most hospitality equipment
In asset finance, rental or leasing structures are more common here than chattel mortgages, especially for equipment like coffee machines. It comes down to usage and expected lifecycle: gear that wears out fast or gets swapped for newer models regularly usually suits a lease better than ownership. Commercial kitchens are more mixed. Some equipment holds its value and utility long enough that owning it outright through a chattel mortgage makes more sense. It depends on the specific asset, not the venue type. See our asset finance page, or the full chattel mortgage versus lease breakdown.
Cash flow: more product options here than most industries
There’s real breadth in what can help with cash flow in this sector, from merchant cash advances through to lines of credit and overdrafts. Which one fits depends on how you’re trading day to day, how quickly you need funds, and whether you’d rather pay for speed and simplicity or a lower ongoing cost. Through our panel, capital can often land within days. At a major bank it can take up to six weeks.
Fair Work Commission’s wage increase, landing on the bill well before revenue catches up.
Sourced data: Fair Work Commission
How much did wage costs move this year?
Wage costs are the clearest example of why that cash flow pressure is real and dated, not abstract. The Fair Work Commission’s Annual Wage Review 2026 increased modern award wage rates by 4.75% from the first full pay period on or after 1 July 2026, which covers the Hospitality Industry Award and the General Retail Industry Award alike. The same decision lifted the National Minimum Wage to $1,004.90 a week, or $26.44 an hour. That’s a step up from the 3.5% awarded a year earlier, so the cost didn’t just keep rising. It accelerated. For a business running mostly casual weekend shifts, that lands as a real, ongoing increase in the wage bill well before revenue catches up.
Business numbers tell the same story from the other side. The ABS counts of Australian businesses put growth in accommodation and food services at 1.3% in 2025-26 and retail trade at just 0.1%, against 3.1% across all industries. Retail was the slowest-growing division in the country bar agriculture, which went backwards. Costs are rising faster than the number of businesses able to carry them.
That timing gap (the cost lands on 1 July, revenue follows whenever trade picks up) is what a revolving facility like an overdraft or line of credit is built for. You draw against it when the gap is real, instead of carrying a lump sum you didn’t need in the first place.
Buying an existing venue or retail business
Yes, this is possible. What lenders want to see is real experience in the industry, or ideally in that specific business, plus a deposit that shows you have skin in the game. Turning up with neither makes it a much harder conversation. Turning up with both is how these deals get done.
Structure depends on the asset
Lease the coffee machine. Consider owning the long-life kitchen gear. Some products fund the painting and wiring too.
The widest product range we broker
MCAs, lines of credit and overdrafts all fit. Speed or ongoing cost decides which.
Experience and a deposit matter most
Experience in the industry, ideally in that business, and a real deposit.
Lenders read hospitality bank statements more closely than most. Consistency is what they’re looking for.
Which product fits which hospitality or retail need?
| Need | Typical fit |
|---|---|
| Fitting out a new venue or store | Fit-out finance, including soft costs on some products |
| Coffee machines, POS, fast-turnover equipment | Lease or rental, matched to usage and lifecycle |
| Commercial kitchen equipment | Lease or chattel mortgage, depending on the specific asset |
| Smoothing cash flow between busy and quiet periods | Merchant cash advance, line of credit or overdraft |
| Buying an existing venue or retail business | Acquisition finance, with industry experience and a deposit |
How risky is hospitality really, compared with other industries?
Riskier than any other industry in the country, once you measure it properly. Hospitality and food services recorded 18.17 first-time external administrations per 1,000 businesses in 2025-26, against a national average of 5.03 and 7.25 for construction.
That isn’t the number you usually see. Headlines rank industries by the raw count of insolvencies, and on that measure construction always wins: 3,472 companies against hospitality’s 2,078. But construction contains 478,651 businesses and hospitality contains 114,369. Ranking by raw count mostly ranks industries by how big they are.
| Industry, 2025–26 | Businesses | Insolvencies | Per 1,000 |
|---|---|---|---|
| Accommodation and food services | 114,369 | 2,078 | 18.17 |
| Manufacturing | 90,879 | 667 | 7.34 |
| Construction | 478,651 | 3,472 | 7.25 |
| Retail trade | 156,143 | 1,006 | 6.44 |
| Transport, postal and warehousing | 261,109 | 813 | 3.11 |
| Professional, scientific and technical | 366,289 | 993 | 2.71 |
| All industries | 2,814,778 | 14,153 | 5.03 |
Derived by us: ASIC insolvency statistics Series 1, first-time external administrations 2025-26, divided by businesses operating at 30 June 2026 from the ABS Counts of Australian Businesses. Neither agency publishes this ratio. ASIC counts companies while the ABS counts all businesses including sole traders, so this is administrations per 1,000 businesses rather than a company failure rate, and it understates risk in industries with many sole traders. The full table for every industry and state is in our business insolvency rate analysis.
We’d rather you knew this before you borrowed than after. It’s also why a hospitality application gets read more carefully than one from a professional services firm with the same numbers: a lender is pricing against a base rate more than three times the national average.
The part that gets missed is that it’s improving. Hospitality insolvencies fell 16.1% in 2025-26, from 2,476 to 2,078, the largest fall of any major industry. Still the riskiest, and heading the right way.
How thin are the margins in this sector really?
Retail runs the thinnest of any industry the ABS measures. Retail trade earned 5.5% gross operating profit on sales across 2025-26, and accommodation and food services 8.4%, against 19.2% in transport and 13.0% in professional services.
Hospitality carries a second pressure most industries don’t. Every dollar of wages in accommodation and food supports just $4.30 of sales, the lowest of the large industries. In wholesale the same dollar supports $13.60. Labour is the dominant cost, so a wage movement or a payroll tax threshold lands harder here than almost anywhere else.
| 2025-26 | Gross profit on sales | Sales per $1 of wages |
|---|---|---|
| Wholesale trade | 6.2% | $13.60 |
| Retail trade | 5.5% | $9.70 |
| Manufacturing | 9.9% | $7.20 |
| Construction | 7.6% | $5.20 |
| Accommodation and food services | 8.4% | $4.30 |
| Professional, scientific and technical | 13.0% | $2.60 |
Derived by us from ABS Business Indicators, June quarter 2026 release, tables 6, 15 and 17, financial year to June 2026. Gross operating profit is before interest, tax and depreciation, so it isn’t what the owner keeps. The ABS covers fifteen industry divisions, not every industry.
This is the arithmetic behind everything else on this page. On a 5.5% margin a retailer keeps about five and a half cents of each dollar before interest and tax, so a quiet fortnight isn’t absorbed. It’s felt. And in the June quarter 2026 retail gross operating profits fell 5.2% while total company profits rose 1.8%.
It’s also why we push back on borrowing for a shortfall rather than a gap. A facility sized against a thin margin has to be repaid out of that same thin margin, and the worst outcome we see in this sector is a business funding last month’s trading rather than next month’s stock.
That margin took another hit this month. From 1 October 2026 the RBA ended card surcharging on eftpos, Mastercard and Visa, so a venue or shop that added a card surcharge now absorbs the fee or builds it into its prices. The RBA has lowered the cap on interchange fees alongside the change and is telling businesses to check what they pay and shop around. Accountants are advising clients to lift prices rather than wear the cost.
How long do hospitality and retail businesses last?
Not long, and this is the other half of the insolvency picture above. 53.7% of accommodation and food services businesses trading in June 2022 were still trading four years later, the second-lowest of any industry, against 61.9% across all industries. Retail trade sits at 56.5%. New venues fare a little better than the sector average suggests: 50.4% of those that started in 2022-23 reached three years, just above the 49.2% national figure.
Source: ABS Counts of Australian Businesses, business survival and entries survival, June 2022 to June 2026. Survival counts businesses still operating, so a business sold or wound up solvently also leaves the count. It isn’t a failure rate.
When finance isn’t the right call yet
If your bank statements show inconsistent conduct, dishonoured payments or a pattern that’s hard to explain, address that before you apply rather than after a decline. Most products in this sector lean heavily on that conduct, so a clean run of statements does more for your application than which lender you approach.
Fitting out, funding equipment, or buying a venue?
Tell us what you’re financing and we’ll match it to the right structure: lease or ownership, MCA or overdraft, whatever fits the asset and how you use it.
Give us the basics below and we’ll call you within the hour, or at the time you choose, then come back with the two or three offers worth your time.