The directors of a Lancaster gym say they have managed to re-finance their business and are now on a firm footing for future trading.
3-1-5 Health Club in Caton Road ran into difficulties when one of its board members withdrew from the business, leaving it in a vulnerable financial position.
As a result, the company’s bank withdrew support and plunged it into further debt.
However co-owner Ceri Smith said the company was able to re-structure its debts and continue trading.
She said: “We went into this adventure well planned with a financial plan, a marketing plan and indeed on day one of opening, right on plan.
“However, shortly into the launch of our venture a key member of our board upped and left unexpectedly, leaving us under-powered, under-resourced and a little shell shocked at the enormity of the task ahead that was compounded by many a business storm.
“Without a re-finance option on the horizon we had to approach our funders and creditors, explain our situation and enter into a formal arrangement to re-structure our debts.
“The arrangement ensures that they get paid an initial amount towards their outstanding amounts which has been funded by the owners and then continued business in order to recoup as trading continues over the coming months and years.
“We thank everyone for their understanding and support in allowing us to establish a solid financial platform that supports the long term sustainability and growth of the company.”
The club, which has more than 4,000 members, was also able to reduce the business rates it pays to Lancaster City Council by 50 per cent, halving its £23,000 a month outlay.
The company told the council that the initial business rates would make the business unsustainable, which was proven by the closure of the previous tenants Total Fitness.
They managed to successfully appeal the rates.
Ceri added: “This along with discretionary rates aligned to the commercial ability of the business to be able to pay has meant that we have been able to make significant monthly contributions and keep the club operating to offer a valuable product to the community.”