One of the sectors we always enjoy working with is the Soft Play sector, and we relish each opportunity we get to operate here and provide financing for soft play centers. We recently started working with Drake’s Den, a Plymouth based business operating since December 2009.
We were first approached by Paul and Trudy Selvester 18 months before they eventually opened, after they’d continually been referred to us by playframe manufacturers and after reading about our success in trade magazines.
When we were first looking to set up the business, the banks were the obvious route for finance. We spent many hours sitting in branches trying to explain what it was we were trying to achieve, but we never convinced anyone that our dream would work.
Most of the banks we spoke to just couldn’t get their heads round an indoor play centre as a business concept and even when we convinced people that there was substance to our plans, they just wouldn’t buy into the numbers we were putting forward – no-one believed our visitor number projections. Eventually, we got bored of taking time off work to go to yet another meeting with the bank to go through the same process and looked elsewhere.
We knew they [Johnson Reed] had a background in this sector and immediately, they understood what we were doing and recognised the potential. We shared our rough budget estimates with them at that time and then when we were able to be more accurate with the detail, we talked again. Mark Johnson was great; we did everything over phone and emails and when we did have any difficulties, he was always on hand straight away with a solution.
We provided the Soft Play Finance for Drake’s Den on opening, and since then we’re delighted to say the business has been very successful. Earlier in 2011, Drake’s Den expanded across Devon, after securing leasing for a Playbus Company vehicle. Initially the Selvester’s went back to their bank for financing, but again hit a problem.
We had smashed through our initial estimates for turnover and profit and all of our projected figures looked good. We believed there was a gap in the market for a playbus and our success with Drake’s Den showed that we had been right about that. But still the banks just did not want to know. Refinancing proved just as difficult, because even though we had a proven business behind us, as a two-year old company we were still obviously paying off our start-up loans. We just couldn’t get near the figure we needed and again walked away from all of the banks with precisely zero funding.
Again, Mark had experience in this area and also understood our mindset and where we were going with the business. He didn’t focus on any negatives and very quickly we had secured the funding for half of the playbus that we required. It is already out on the roads of Devon and proving extremely popular, as we knew it would be.
I’d love to go back and see some of the banks again and show them how wrong they were. I understand these are difficult times, but we have easily beaten all of our targets. We simply would not be where we are now without Johnson Reed’s backing.
We provided the three-year term of finance for the £40,000 project to lease, kit out and put the double-decker mobile play bus on the road.
Here’s a quote I gave to Indoor Play Magazine:
From Paul’s and Trudy’s points of view, they had worked with us before and knew that we had a good understanding of not just the sector, but also their business and objectives.
We could see not just the additional revenue streams that could be generated from the play bus, but also the significant marketing potential it held for Drake’s Den as it travelled around Devon. Anything that can demonstrate a residual value and that it can bring more income into the business is obviously more attractive for finance providers.
The deal was done after we accessed our panel of lenders. We do have our own money and immediate access to that should we decide that the best route forward would be to finance a project ourselves. Between ourselves and our panel we offer indoor play a very attractive option for securing finance on their terms.
We’re different to the banks, who can be very restrictive due to their understandable lack of knowledge of the intricacies of the sector and the opportunities that exist.
