Capitalisation of a yet to be built asset
Discussion
Hi all, looking to brainstorm an idea and am hoping the powerfully built directors on PH can help.
I've somehow found myself helping to build a village hall. We're at planning stage and the plans include a cafe.
We're exploring funding options for the build and one idea is to sell a long (ish) lease on the cafe for an up front fee which would be used to help build the hall.
Is this a good idea? Is it even possible? How would it work in practice? I can see pros and cons to it but wanted to get some wider views from people who have actually run a business or who have some interesting viewpoints.
Thanks in advance.
I've somehow found myself helping to build a village hall. We're at planning stage and the plans include a cafe.
We're exploring funding options for the build and one idea is to sell a long (ish) lease on the cafe for an up front fee which would be used to help build the hall.
Is this a good idea? Is it even possible? How would it work in practice? I can see pros and cons to it but wanted to get some wider views from people who have actually run a business or who have some interesting viewpoints.
Thanks in advance.
Done a bit of this....!
Highly unlikely that you'll be able to offer the consistency and quantity of footfall (customers) to attract a company to a rent level that would make it worth your while. Bags of red tape and admin (assuming it's a voluntary / no-for-profit type affair, you'll be reliant upon the inputs of suitably skilled volunteers to help out with this).
Outfits like Costabucks will want to see customers in - at the very least - the high hundreds, each day, 7 days a week (I think they're franchises anyway but you get the point)
Even if it does pan out, you'd be letting someone else make all the money when you could hire a few locals to run it and keep the proceeds yourself.
One of the best money raising methods is a bar and licence. If not a permanently open bar, one that is available to those that hire the hall - condition of hire is that you run the bar and sell the booze. Lot of money to be made on this.
Neither helps on the upfront funding you're looking for but that's what village fetes are for I guess!
Highly unlikely that you'll be able to offer the consistency and quantity of footfall (customers) to attract a company to a rent level that would make it worth your while. Bags of red tape and admin (assuming it's a voluntary / no-for-profit type affair, you'll be reliant upon the inputs of suitably skilled volunteers to help out with this).
Outfits like Costabucks will want to see customers in - at the very least - the high hundreds, each day, 7 days a week (I think they're franchises anyway but you get the point)
Even if it does pan out, you'd be letting someone else make all the money when you could hire a few locals to run it and keep the proceeds yourself.
One of the best money raising methods is a bar and licence. If not a permanently open bar, one that is available to those that hire the hall - condition of hire is that you run the bar and sell the booze. Lot of money to be made on this.
Neither helps on the upfront funding you're looking for but that's what village fetes are for I guess!
Thanks both.
Background is purely a charitable trust. We're a bunch of volunteers trying to get a village hall built for the community but want to lease the cafe to generate income.
We've definitely considered a licenced bar, god knows I'll contribute to the takings!
We have (provisional) s106 monies but need a little extra to get us over the line. I think lottery funding etc is probably more realistic.
Starbucks et al will see the site as being too sleepy and they are probably the only ones with the up front capital to go for such a scheme. The locals would probably revolt if we had a costa in the village too!
Background is purely a charitable trust. We're a bunch of volunteers trying to get a village hall built for the community but want to lease the cafe to generate income.
We've definitely considered a licenced bar, god knows I'll contribute to the takings!
We have (provisional) s106 monies but need a little extra to get us over the line. I think lottery funding etc is probably more realistic.
Starbucks et al will see the site as being too sleepy and they are probably the only ones with the up front capital to go for such a scheme. The locals would probably revolt if we had a costa in the village too!
Have you considered social investment type loan finance to bridge the gap?
I deal with charities in Scotland predominantly, and have a contact in a Scottish based organisation that provides this sort of funding, but he used to work down south so may have some thoughts if you wanted me to ask.
As an aside, have you looked into the tax implications of non directly charitable activities, and also whether there are any VAT reliefs available?
I deal with charities in Scotland predominantly, and have a contact in a Scottish based organisation that provides this sort of funding, but he used to work down south so may have some thoughts if you wanted me to ask.
As an aside, have you looked into the tax implications of non directly charitable activities, and also whether there are any VAT reliefs available?
Gassing Station | Business | Top of Page | What's New | My Stuff