What is an SPV?
An SPV is a Special Purpose Vehicle which is a separate company to the business/individual who owns the main company. SPV’s are set up by developers who are looking to raise money or obtain finance for their projects. The purpose of creating an SPV is to keep the risks and liabilities tied to the specific SPV. Should a developer own multiple SPV’s then each individual company will have no detrimental impact on one another thus minimising the overall risk.
When developers set up SPV’s they are not regulated by the FCA therefore do not come with FSCS protection. In order to limit the risk to investors if a developer is raising funds by way of a loan note, the company will tend to put a debenture or legal charge over the SPV as collateral to note holders. What this means is that in the event of a default the legal charge/debenture will belong to those that have invested, and the asset can be resold to recoup any funds.
Property in general has always been a profitable asset due to the constant demand in the UK market and also the ease of selling them whether pre-planning, planning gained or even completed & tenanted projects, there is always a recourse of exit to recoup the money back that was raised.
The opportunities we offer at HyLife have all undergone a rigorous due diligence and come with first legal charges and debentures so if you would like to discuss what is available and you have certified yourself as a Sophisticated or High-Net-Worth investor just get in touch.