Provisio Funding works alongside Provisio Capital, a private crowdfunding platform that is accessed solely by seasoned investors. Each funding opportunity is considered separately on its merits and funded by ‘one-off’ syndicates of Provisio investors and we support all our entrepreneurs throughout their investment or development journey and are a lot more flexible than conventional banks. We work in partnership with entrepreneurs; property investors, developers and business owners to make property projects ‘happen’ by providing up to 95% of the cost-to-complete and a lot of ‘hands-on’ practical support.
If you’d like to find out more about how Provisio works with developers or investors please fill in the form below relevant to you. You will receive an email with a link to a downloadable PDF (please check junk folder if the email is not with you within five minutes).
How Does It Work?
Provisio Funding in the U.K. works with Provisio Capital on the Isle of Man to provide crowd funding opportunities to seasoned investors, high net worth and sophisticated investors, seeking a fixed income return.
These investors come together in ‘one off’ Provisio Capital syndicates to fund each opportunity.
Where there is development funding, the Provisio syndicate investors generally expect their capital and financial return back within 12 months however, they will fund multiple and dove-tailing advances where a project is developed in phases over a longer period of time.
Where it is an investment property, Provisio can provide funding for periods up to 20 years.
A bank will typically have high ‘up-front’ legal and professional costs, will normally charge arrangement and exit fees, often based on sales values, as well as interest. The bank will expect the developer contribution and any mezzanine finance committed before any senior debt is drawn down so may in fact advance a loan for a very short timescale. Bank’s typically do not base their lending on a peak borrowing requirement, assuming property sales, therefore the bank costs are artificially high where sales occur prior to the completion of the development. The bank will also expect full repayment of all sums borrowed before the developer receives any capital or profit. We can demonstrate with real examples that Provisio Funding is a less expensive alternative to conventional bank funding.
For those developers with a land or buildings, with or without planning consent, we are pleased to offer, through an associated business, the option of the ‘off-site’ manufacturing of energy efficient buildings alongside a Design and Build construction contract with up to 95% development funding.
We can also provide sales-aid finance to cover-off residential purchasers mortgage deposits and effectively providing purchasers with 100% finance.
These options are not obligatory as many developers have their own construction businesses, preferred contractors or bank funding sources and can ‘pick and choose’ which element Provisio provides and they utilise.
Provisio Funding charge an arrangement fee, added to the funding, and Provisio Capital charges a monthly rate of return on the drawn-down funds for the ‘use of money’. Provisio Capital received a management and success fee at the end of the project based on the net profit before tax of the development or investment.
The ‘all-in’ cost of Provisio Capital funding is typically between 25% and 40% of the pre-agreed development profit, leaving the developer with between 60% and 75% but crucially having only provided a very small proportion of the ‘up-front’ unsecured equity capital.
Because of the reduced capital requirement and the ‘gearing’ effect, the developers Return on Capital is far higher than it would be otherwise. This also assists the developer in successfully undertaking a project where they did not have enough unsecured equity or by spreading their capital over more development or investment opportunities!