Provisio was approached by experienced licenced trade operators to help fund the purchase of a restaurant and public house. The entrepreneurs did not have sufficient capital to purchase the properties, which required considerable remediation, and to fund the development and ‘fit-out’ to the standard they considered necessary.
We enter into a novel and niche funding arrangement where Provisio purchased the properties, each held in a single purpose vehicle, and then leased the premises to the operators who used their free capital to create attractive ‘in-demand’ assets. The ventures were highly successful and the operators had a pre-agreed purchase option for each SPV, thereby avoiding Land and Building Transfer Tax, and using a pre-defined and easily understood formula. As the business prospered, the operator built up their cash reserves and bought-out the Provisio interest in phases until they had outright ownership of both properties.
Provisio received rental income and an agreed uplift in capital value on disposal of each portion of equity.