Most catering businesses are unfamiliar with EU funding schemes available to the sector, with only around a fifth applying for such schemes in the past two years.
Only one fifth (21%) of caterers applied for EU funds to help them grow their business, with around two-fifths saying they were not aware of suitable schemes, according to a recent survey commissioned by the Association of Catering Establishments (ACE).
The study conducted by auditing firm PwC found that just under one sixth (17%) of businesses highlighted difficulties finding information about eligibility, deadlines and required documentation for EU support schemes.
Others highlighted lengthy and complex procedures and a lack of support preparing applications, according to the survey covering the first quarter of this year.
Almost half (45%) want guidance with applications, and a further 30% would like more help and training with applications. Two-fifths said they would consider using EU funding for future projects, however.
Meanwhile, only 15% of caterers attempted to access bank financing over the same period, while only one in ten said their funding request was approved.
The main barriers to entry were processing times, collateral requirements and the burden of financial documentation, the survey found.
Of the businesses that applied for funding, most sought the funds for expanding an existing outlet or opening a new one, working capital or cashflow support. Businesses said faster approvals, guarantee schemes and lower interest rates would help improve access to bank financing.
The difficulties accessing EU and bank financing contrast with investment seen within the sector; an overwhelming majority (84%) of respondents said they had invested in their business over the past two years, with most (70%) using their own funds.
Addressing a press conference announcing the findings, ACE president Michelle Muscat called the figures “worrying, because if the industry wants to invest and ensure growth and quality, access to funds and grants is a must”.
Such funds allowed eateries to “launch new concepts, acquire other businesses, innovate and secure long-term cash flow,” she said.
Stressing that “the numbers don’t lie”, Muscat said she hoped the survey would kickstart stakeholders to assist the industry.
“Access to finance is just one part of the puzzle,” she said. “It won’t mean anything if investment doesn’t keep up”.
Speaking to The Business Picture on the sidelines of the event, she acknowledged that while some restaurant owners might not actively be seeking information, especially the smaller operators, it was therefore more important than ever that they be provided with information to help them apply for funding.
“The appetite from investors is there – people want to grow and are looking for quality – but we need more awareness.”
Tourism Minister Jo Etienne Abela told attendees that while the ministry for EU funds had more visibility over the schemes available to the sector, his ministry could “act as a channel” between restaurant owners and other ministries to help secure funds.
Photo: Chris Sant Fournier.
“There is a need for more discussion, but I pledge we will get there because the ball has been set rolling,” he said. “Our ministry cannot push on its own; this is a whole government approach. But the tourism ministry stands ready”.
A representative for the financial services sector said he found it surprising that the sector was not more aware of funds available “despite the banking sector putting so much information out”.
However, he acknowledged that information online, especially on social media, could be “overwhelming” for operators.
Mark Scicluna Bartoli from the Institute of Financial Services Practitioners admitted banks were “struggling with processing times”, explaining they were “overwhelmed with demands for investment” more generally, and not just from the catering sector. “And there is pressure on frontliners, so it could be coming from that,” he said.
“The products are there, but the lack of awareness is painful, I admit,” said Scicluna Bartoli, while suggesting that workshops to help eateries apply for funds could prove useful.
ACE junior vice president Omar Vella called funding schemes a “key factor” for growth, especially for smaller operators. He said he hoped the survey would “trigger more debate and act as a call to action, with the results highlighting a need for further discussion”.
PwC gathered responses from 233 businesses, with 1,200 invited to take part in the survey. Just over two-thirds of respondents represented restaurants, with other types of businesses including wine bars, casual eateries, cafes, snack bars, fine dining restaurants, food trucks and operators with multiple offerings.
