(Save the date: RealShare Net Lease West comes to The California Club, Los Angeles, November 1 - 2.)

ATLANTA—STORE Capital just completed a $19.2 million sale-leaseback with Tappan Street Restaurant Group (TSRG), the parent company of casual dining restaurant chain Taco Mac. Taco Mac has 28 locations across metro Atlanta, Charlotte, N.C., and Chattanooga, TN.

“In today’s highly regulated banking environment, many businesses find that they have reduced access to capital,” Christopher Volk, CEO of STORE Capital, tells GlobeSt.com. “As a result there is a greater need for efficient long-term capital solutions in the marketplace.”

STORE Capital purchased six properties, including five Taco Mac restaurants located in Georgia and North Carolina and TSRG’s corporate headquarters located in Alpharetta, GA. Store then leased the properties back to TSRG under a long-term, triple-net lease.

“As a corporate treasury tool, a sale-leaseback is a debt and equity substitute,” Volk says. “With a sale-leaseback, the customer does not have to provide the 20% to 40% equity that is often required in traditional financing. In addition a sale-leaseback provides long-term financing, with payment constants lower than other long-term capital and with no covenants.”

The sale-leaseback transaction occurred simultaneously with an equity investment by CIC Partners, a Dallas-based middle-market private equity firm, into the restaurant chain. The investment aims to help Taco Mac continue expanding.

“We evaluated a number of potential real estate partners and were pleased to work with Store on our recent sale-leaseback transaction,” Bob Campbell, CEO of TSRG, said in a statement. “Their approach to the financing was tailored to match our objectives and will help us continue to implement our growth plan.”

The five Taco Mac properties and TSRG’s corporate headquarters adds to STORE Capital’s robust portfolio of restaurant properties. The company also serves a real estate intensive institutions including for-profit secondary education, home furnishing stores, fitness centers, early childhood education and pre-school services, grocery stores and movie theaters, among others.

Because of their limited access to credit, Volk says many mid-market businesses are finding it increasingly difficult to obtain financing from traditional sources of capital like banks. What’s more, he adds, insurance companies and credit unions can’t afford to step-up and provide the type of long-term financing required by these middle-market companies.

“This lack of liquidity has created a market opportunity for STORE where we serve as a reliable source of long-term capital for a variety of underserved businesses,” Volk says. “We can provide higher leverage, at a lower overall cost of capital than other sources of capital available to the operator.”