The gym operator, which has been battered by lockdowns and restrictions on indoor gatherings aimed at curbing the spread of COVID-19, is accessing the funds through the Large Employer Emergency Financing Facility (LEEFF), which provides bridge loans to companies that are struggling to secure private market financing.
In a statement to BNN Bloomberg, GoodLife Founder and Chief Executive Officer David Patchell-Evans said the company was forced to tap into the federal loan program due to the unprecedented shutdowns.
“We’ve faced many ups and downs over the years, but none as challenging as the last year has presented to us; in which our revenue dropped to near-zero at the height of lockdowns and we only had a total of 57 days throughout the pandemic where all of our club regions were open,” he said.
Patchell-Evans also said GoodLife only intends to borrow what is “essential” to meet the company’s operational needs.
GoodLife employs more than 10,200 across more than 450 locations nationwide.
The gym operator is just the fourth major Canadian company to avail itself of the LEEFF financing, following Sunwing Airlines Inc., Conuma Resources Ltd. and Gateway Casinos and Entertainment Ltd. The program, which is available to companies seeking loans of $60 million or more and can demonstrate consistent annual revenue above $300 million, has attracted tepid demand since its inception.
That weakness in demand is due in part to the somewhat onerous interest rates charged under the program, which start at five per cent for the first year, and rise to eight per cent after 12 months. The rates rise two per cent per year thereafter.