Nation’s Restaurant News: Capital squeeze
Annual chain restaurant loan originations are still below 2008 levels, according to Restaurant Research LLC, a restaurant data analysis firm in Redding Ridge, Conn. Loan originations totaled about $7.1 billion in 2007, then fell to $4.5 billion in 2008, and have since then dipped even further, hitting $3.0 billion in 2009. During 2010 and 2011, total originations showed an uptick — to $4.0 billion and $4.3 billion, respectively — but are still below prior levels.
The lack of growth financing means many operators can’t secure enough capital to expand into new markets, open units, remodel existing ones or purchase equipment for new menu items.
“Access to capital will remain the No. 1 issue for franchising in 2012,” said Stephen J. Caldeira, president and chief executive of the International Franchise Association. “While there has been a bit of a thaw for both big and small businesses, there is a long way to go.” Read more