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Ways to Finance Your Food Truck Business

Written by Banks Editorial Team

Updated May 23, 2023​

2 min. read​

Are you looking to break into the food truck industry? Whether you’re a newcomer or you are a food truck owner looking to expand your existing restaurant operation, chances are you’ll need a hefty sum of cash to get your new venture up and running.

If you don’t have a ton of reserves lying around, there are ways to get the capital you need as a business owner. In this guide, you’ll discover food truck loan options and how to qualify and apply for funding.

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Loan Options for Financing Your Food Truck

Ready to move forward with securing financing for your food trailer? Before calling your local bank or credit union, also consider online lenders to explore your small business loan options.

Startup Loans

A startup loan is a way to get the funds you need to launch with confidence. You won’t have to convince relatives or friends to believe in your vision and fork over their hard-earned cash. Plus, you can skip the pitches to investors, which could result in giving up a share of your equity in the business.

Equipment Financing

The equipment you’ll need for your food truck is one of the more costly expenditures. Consider equipment financing to cover the costs in the short term. Most lenders have competitive interest rates and rapid funding times. But be mindful that these loans are secured by the equipment you purchase. So, defaulting on the payments means the lender could seize the equipment and sell it to recoup their losses.

Small Business Administration (SBA) Microloans

If you need $50,000 or less to fund your food truck business, a Small Business Administration (SBA) Microloan may be ideal. SBA loans are offered through lenders in the field and not directly from the SBA. Before funding the loan, though, the SBA will likely require a personal guarantee and collateral. You can use the loan proceeds to purchase equipment, inventory or supplies. Working capital costs are also allowable expenses under these loan products.

Business Lines of Credit

Maybe you have enough cash on hand to get started but could use a safety net soon? A business line of credit is worthwhile as it gives you a pool of money to draw against as needed. The key benefit is you’ll only pay interest on the funds you use.

You can make as many withdrawals and repayments as you’d like during the draw period and only pay interest on the amount you borrow. When the draw period ends, you can request another line of credit if needed. In the meantime, you’ll begin making payments (principal and interest) on the remaining balance. The amount you qualify for depends on your credit score and annual revenues.

Who Qualifies for Food Truck Financing and Leasing?

The qualifications will depend on the type of financing or leasing you’re considering. As a rule of thumb, you should meet the following criteria:

  • Have a personal credit score between 550 and 640
  • Be in business for at least six months
  • Earn monthly revenues of $10,000 or more
  • Prepare to make a down payment of 5 to 20 percent (equipment financing only)
  • Present a solid business plan

How to Use Financing to Grow Your Food Truck Business

There are several ways you can use financing to expand operations. You can cover startup costs, including inventory, equipment, marketing, staff and permits. If you’ve been in business for a bit, upgrade equipment, hire more staff, purchase a second truck, make costly repairs, expand your menu or ramp up marketing to make your food truck more visible to the masses.

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