Use case

Funding leasehold improvements: how to size it and what to watch.

Renovating leased space adds value you cannot take with you; plan it carefully.

✓ Checking what you qualify for does not affect your credit score.

How should a business fund leasehold improvements?

Short answer: Negotiate a landlord improvement allowance first, then get quotes and add a buffer for overruns. Improvements last as long as the lease, so longer financing such as a bank or government-backed loan usually fits; a short advance suits the final gap or work that pays back quickly. Plan for the weeks the space is not earning.

Key facts

Ask for a landlord allowance first
Improvements last as long as the lease
Longer financing usually fits
Budget for weeks without revenue

What this looks like

Renovating leased space adds value you cannot take with you; plan it carefully.

A new or renewed lease often comes with build-out needs: flooring, lighting, washrooms, signage and accessibility upgrades.

How to size it

Fund the work net of any landlord allowance.

Illustrative arithmetic

A physiotherapy clinic depositing about $80,000 a month asks for $30,000 for a treatment room build-out. At a 1.22 factor the payback is $36,600, a cost of $6,600. Over roughly 6 months that is about $290 per business day, or close to 8% of monthly deposits.

Total payback: $36,600.
Cost: $6,600.
Payment: about $290 per business day, close to 8% of monthly deposits.

Every figure on this page is illustrative arithmetic in Canadian dollars. It is not an offer, a quote or a promise of approval.

Which structure tends to fit

Longer improvements may suit government-backed loans; urgent or modest work suits short-term funding.

Where it goes wrong

Improving a space with a short lease
Overruns
Permits

Before you apply

Confirm lease length
Get landlord allowance in writing
Get permits

Typical starting points

Monthly revenueTypically from around $20,000 a month in deposits for Canadian files. The exact line varies by funder and by file.

Time in businessTypically about 12 months. Newer businesses can be reviewed, but the options narrow.

Account healthLimited low-balance or negative days. Funders read the last few months of bank statements for this.

CreditScores from 500 are considered. A score of 600 or higher opens more options and better offers.

DocumentsA signed application and recent business bank statements, typically the last four months.

Existing advancesFiles with an existing advance can be reviewed, including second position.

Negotiate the allowance

Landlords often contribute to improvements on longer leases. Ask before you borrow.

Before you commit

Improvements usually belong to the landlord at the end of the lease. Make sure the remaining lease term is long enough for the improvements to pay for themselves, and negotiate renewal options before you build.

Talk it through

Merchant Fund Express reviews Canadian businesses in every province and territory. If you would like a specific answer for your business rather than general guidance, send a signed application and your last four months of business bank statements, or call (305) 384-8391 first to ask a question.

Sources and review

Reviewed by the Merchant Fund Express team on October 12, 2026. Official pages checked as of that date.

Common questions

How much should I ask for?

Ask for the amount you can name in dollars and tie to a quote, invoice or schedule. A smaller, specific request is easier to approve and cheaper to repay.

Which structure is best?

It depends on whether the need is a one-time purchase or a recurring gap. See the comparison pages for the trade-offs.

How fast can I get it?

Decisions are often the same day on a complete file, and funding can follow the next business day.