When the fit-out costs more than the plan said it would

A South East start-up practice ran over budget when the property conversion and fit-out cost more than planned. We arranged additional asset finance on top of the existing start-up loan to cover the shortfall. The partners secured the full £400,000 needed, £280,000 in start-up finance plus £120,000 in asset finance.

The Situation

Two partners in the South East were opening a brand new dental practice, the kind of project that requires careful planning across property, fit-out, equipment and finance all at once, and getting all of those moving together without one holding up the others, since a delay on any single element tends to ripple through the whole timeline.

Things started well. Then the property conversion turned out to cost more than originally projected, and the fit-out works ran over budget. That’s a common enough pattern in start-up projects, the further into a conversion you get, the more the building tends to reveal about itself, structural issues, unexpected specification changes, costs that simply weren’t visible until the work was underway, but it left a real shortfall regardless of how understandable the cause. The primary start-up loan had been sized for the original budget, not the revised one, and it wasn’t designed to stretch to cover the gap that had opened up.

What We Did

Rather than trying to renegotiate the main loan from scratch, which would have meant reopening a facility that was already working perfectly well for its original purpose, we arranged additional asset finance on top of the existing start-up facility, specifically to bridge the shortfall created by the fit-out overrun. That added a layer of complexity to the overall funding structure, two facilities instead of one, but it solved the actual problem without unpicking finance that was already in place, agreed, and doing its job.

The Result

We arranged around £280,000 in start-up finance alongside a supplementary £120,000 in asset finance, giving the partners the full £400,000 they needed to bring the practice to life as originally envisioned, rather than a scaled-back version of it that compromised on the original plan.

The lesson generalises to most start-up projects: budget overruns during a property conversion aren’t rare, and the right response usually isn’t scaling back the plan, it’s structuring additional finance around the specific gap that’s appeared, rather than treating the whole funding package as broken because one part of it came in over budget.

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