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FUNDING OPTIONS Rob Straathof, CEO at Liberis Finance, an awardwinning funding provider for small businesses – with a second consecutive win of Alternative Lender of the Year (SME category) at this year’s Credit Awards – talks about the funding landscape in the health and fitness industry.
As revealed in the 2019 State of the UK Fitness Industry Report, the UK health and fitness industry, now worth £5 billion, is healthier than ever with increases of 2.9% in the number of fitness facilities, 4.7% in the number of members and 4.2% in market value. This means that more than one in seven people in the UK are now a member of a gym. It goes without saying that the opportunities in the market are therefore tremendous. But with growing markets comes heightened competition, including that from the growing at-home fitness trend, boutique studios and tech-enabled fitness. This means successful businesses need to innovate and offer members an experience they can’t find elsewhere. More often than not, the ability to innovate in this way relies on investment, and funding, particularly when using banks, can be difficult to access. It is true that the value of overdraft facilities available through banks has halved since 2011. And that, overall, banks have tightened their lending, preferring to go down a route of structured loans. Where overdraft facilities are offered, they can be extremely expensive, and this has naturally driven a need for extra cash. Traditional finance providers can be slow to embrace new technologies, and their forms of finance are not always agile enough to accommodate the rhythm and needs of small businesses. This has given rise to the Alternative Lending community, who can be quicker to 56
respond and more imaginative in their proposition. Challenges facing the health and fitness industry The health and fitness industry will need funding for different reasons. For some, it is about investment and growth. For others, it is about cash flow; late payments from larger customers and indeed members is a continuing problem. But even when there is certainty of payment, there is still often a funding ‘gap’ that needs to be filled. A recent survey by Liberis Finance – with 400 SMEs from the health and beauty/fitness, retail, restaurant/ café, hotel/B&B, and arts and entertainment sectors found that while nearly two thirds (62%) of businesses see funding as a method to grow, only about half of them actually make use of the funding options available. And of those businesses using funding, 20 30% face a funding gap in not being able to borrow the full amount, or not being able to borrow at all. This not only puts pressure on working capital and growth targets but also on day-to-day business and recruitment. Businesses are not able to hire the people they need to succeed, buy the latest equipment their customers demand or invest in the marketing that gets their businesses known.
Funding options So, for a health and fitness business with the appetite to grow, what can the Alternative Finance sector
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