Players: Jason Sive, Mark Dowson
Company: First Health Finance
Contact: +27 (0)21 421 8508, fhf.co.za
Recession be damned – cosmetic surgery is on the increase in South Africa. One entrepreneur who spotted a gap in the market for specialist finance to pay the costs of procedures such as breast augmentation, rhinoplasty and liposuction is Jason Sive. He spent a year working for a specialist finance company in Australia, where he came across patient finance for procedures not covered by medical aid — anything viewed as elective or non-essential surgery.
On his return to South Africa, he met up with Mark Dowson, an ex-banker, and the two decided to open a niche finance company focused on four areas: cosmetic and reconstructive surgery, dental procedures, corrective eye surgery and hair restoration.
“For a start-up finance company, your stock in trade is your cash,” says Sive. “You have to ensure the business is adequately capitalised to carry itself into the second phase of the funding process. Our initial funding was provided by Mark and five high net worth private investors. That capital carried us initially, after which we got finance from the banks.”
Sive and Dowson launched the business in early 2008, not a great time for anyone, let alone a start-up. “A few years ago, an on-lender would have been able to raise funds against an existing debtors’ book, which would have been seen as an asset. Three years ago, things changed, and that security is gone. People thought we were nuts to launch a consumer finance business at the start of a recession.”
The art of discretion
That was why the partners spent three months on the road, visiting medical practices before they hired anyone. “Because it was a greenfield product, it was essential for us to educate doctors about the offering. We also used our experiences to train the sales team we eventually brought on board.”
By 2010, First Health Finance had received applications valued at more than R130 million, 30% up from 2009.
Sive attributes the business’s success to personalised service, a key element of this type of offering. “Procedures like fertility treatment and breast augmentations are very personal and people would rather not have to explain to a bank why they need to borrow money. They can apply online. Our consultants are trained to deal with customers in these situations and make them feel completely comfortable. They even make appointments with the right doctors.”
Another factor is that the doctors are happy. “We pay them directly, so they never have to be concerned about money. It also means they can offer patients an alternative to cash and credit card payments, which is important as access to credit is not what it used to be. As a result, we now have a database of more than 2 000 practices covering every type of procedure.”
Sive says First Health Finance has made it possible for the average person to have a procedure that can be life-changing.“The industry is growing thanks to television shows like Nip/Tuck and Dr 90210. We’re perfectly positioned to take advantage of that and meet people’s need to feel better about themselves.”