Financing still an issue for restaurateurs

Despite the recent uptick in the economy, restaurateurs' access to capital is still tough to come by, National Restaurant Association research has found.

According to the 2012 Restaurant Industry Forecast, approximately half of restaurant operators questioned said getting credit and/or financing was more difficult in 2011 than it was in 2010. Conversely, one out of 10 said it was less challenging.

"It is getting better," said Hudson Riehle, senior vice president of the NRA's Research and Knowledge Group, "but growing a restaurant operation is intrinsically dependent on the ability to obtain financing. That said, after being in the fifth year of economic weakness, options have improved somewhat, but they still are not what they were before the onset of the recession in 2007. Consequently, operators do still report challenges in obtaining necessary financing."
The report determined that single-unit and multiunit franchisees experienced more credit and financing roadblocks than independent restaurateurs did. Comparatively, less than half of independent operators reported similar difficulties.

The study further found that operators in the quick-service and fast-casual segments of the industry reported the most difficulties in trying to access capital. Nearly six out of 10 respondents said financing was harder to come by in 2011 than in 2010.

In a segment-by-segment breakdown, 53 percent of family-dining operators said accessing capital was harder in 2011 than in 2010, while 46 percent of casual-dining and 41 percent of fine-dining restaurateurs reported similar findings.