GE Financing Standards for 2010
I attended the 2010 UCLA sponsored Chain Restaurant Operators Conference yesterday. The GE Capital Finance representative indicated with me the change of GE's 2010 game rules in financing restaurants.
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GE has earmarked $1 billion for restaurant financing. That's way down from prior years.
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The lender's primary interest is in selecting leading, name brand QSR franchisees, of at least 5 units or more to look at. And, secondarily, independent chains of 30-40 units, with multiple regional success demonstrated, with at least $5M in EBITDA.
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Significant equity (30% plus cash) and tough loan covenants are routine requirements, now.
John A. Gordon is Principal and founder of Pacific Management Consulting Group, which provides chain restaurant sales, profitability, earnings and economics research and special analytical projects to those in, or who need to know about the restaurant sector. Among others, we support franchisees and those supporting franchisees.
Gordon has a long background in chain restaurant operations and financial management roles, such as cost analyst, financial analyst, manager of planning and analysis and CFO, and has been consulting since 2000.
He is passionate in providing independent, creative, detailed and useful perspective, with no conflicts of interest. Email him or call (619) 379-5561.
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Whew! Now that's tight money
Whew! Those are really tough standards. Money is hard to come by in this economy.