The leisure industry is a diverse and dynamic sector that includes everything from hospitality and tourism to sports, recreation, and entertainment. Whether it’s investing in a new complex, expanding to new gym locations, or opening a themed attraction, businesses in the leisure sector often require significant capital to grow and prosper. This is where leisure finance comes into play, providing the funds needed to fuel innovation, enhance customer experiences, and drive business growth.
Let’s take some time to explore what leisure finance is, how it works and how businesses can benefit from it.
What is leisure finance?
Leisure finance is a specialised funding solution tailored for business that operate within the leisure industry. It has a multitude of uses which includes purchasing equipment, refurbishing facilities, funding new development sites and covering operational expenses during low seasons. As the leisure sector can experience seasonal fluctuations in revenue, access to flexible and tailored finance products is vital. Leisure finance can include loans, leasing, asset finance, invoice finance and merchant cash advances.
What types of businesses use leisure finance?
There are several different business types which use leisure finance:
- Hospitality (including hotels, restaurants and leisure resorts)
- Tourism
- Sports and fitness centres
- Theme parks and attractions
- Entertainment and events
- Recreational facilities
What are the leisure finance options?
Business loans – a traditional business loan where a lump sum of money is provided which can be used for areas such as refurbishments, new property purposes, investment in new technology, equipment purchases, opening new facilities and launching new marketing campaigns. Loans can be both secured (against existing business assets) or unsecured (no collateral required).
Asset finance – allowing businesses to acquire equipment or vehicles without paying the full costs upfront. Funding can be flexible, and repayments will be made over a set period. This is an ideal choice for businesses that rely on expensive equipment such as gyms needing fitness machines, restaurants needing kitchen appliances and sports clubs needing specialist equipment.
Lease finance – helping businesses to acquire essential assets like property, equipment, and vehicles without the large upfront costs of ownership. Through lease finance, companies can gain access to everything from high-quality kitchen equipment and furniture to transportation fleets for guest services, all while preserving cash flow for other operational needs. Leasing can also provide flexibility to adapt to changes in market demand or property upgrades, there are also some excellent tax benefits.
Invoice finance – with the fluctuation of seasonal revenue it can be a challenge to maintain a consistent level of cash within the business. Invoice finance will help to unlock the value of unpaid invoices, providing immediate cash to cover ongoing expenses. This can be ideal for event organisers, travel agencies and tour operators who can experience gaps between booking services and receiving payment.
Merchant cash advances – providing a business with a specific amount of funding in exchange for a percentage of future credit card sales. Ideal for leisure businesses such as restaurants, food outlets and bars that generate consistent daily card transactions. A merchant cash advance is very flexible and can provide quick access to capital.
Typical examples of what leisure finance can be used for include:
- Facility renovations and upgrades
- Equipment purchasing or leasing
- Seasonal cash flow management
- New product or service launches
- Marketing and advertising
- Expansion into new markets
In summary leisure finance is a powerful tool that enables businesses in the sector to manage cash flow, invest in growth opportunities, and stay competitive in a rapidly changing market. By leveraging the right type of financing, businesses can enhance customer experiences, improve operational efficiency, and unlock new revenue streams, which ultimately ensures long-term success in the highly competitive industry.
The NGI Finance have a team dedicated to assisting with securing leisure finance deals. For help please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.
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