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Writer | Small business, business banking, business loans
Randa Kriss is a small-business writer who joined NerdWallet in 2020. She previously worked as a writer at Fundera, covering a wide variety of small-business topics including banking and loan products. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona College.
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Food truck financing can be used to purchase a new or used food truck for your business. Some of these small-business loans may also be used to buy other types of equipment, make business improvements, purchase inventory or cover working capital needs.
You can get food truck financing from several different sources, including banks, SBA lenders and online lenders. In general, the best food truck loan will be the most affordable option you can qualify for that meets your needs.
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NerdWallet's small-business loans content, including ratings, recommendations and reviews, is overseen by a team of writers and editors who specialize in business lending. Their work has appeared in The Associated Press, The Washington Post, MarketWatch, Nasdaq, Entrepreneur, ABC News, MSN and other national and local media outlets. Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
You can use financing from JR Capital to purchase a new or used food truck, as well as other equipment for your business. Funding is available as fast as two days.
SBA 7(a) loans offer competitive interest rates and long repayment terms. These loans can be used to buy a food truck, purchase or upgrade other equipment and cover working capital needs.
U.S. Bank offers up to 125% financing to help you cover additional costs associated with getting your food truck up and running, such as freight, taxes or warranties.
U.S. Bank Equipment Financing
Max Loan Amount
$1,000,000
Min. credit score
Undisclosed
U.S. Bank can provide up to 125% in equipment financing (including soft costs), with no down payment required.
Pros
Offers up to 25% in additional financing to cover soft costs, such as installation, taxes and freight.
No down payment or blanket lien required.
Option to finance multiple pieces of equipment on one contract.
Cons
Can only apply online for transactions under $250,000.
Interest rates and qualification requirements not disclosed online.
Qualifications:
Minimum credit score: Undisclosed.
Minimum time in business: Two years.
Minimum annual revenue: Undisclosed.
Max loan
$1,000,000
Min. Credit score
Undisclosed
U.S. Bank can provide up to 125% in equipment financing (including soft costs), with no down payment required.
Pros
Offers up to 25% in additional financing to cover soft costs, such as installation, taxes and freight.
No down payment or blanket lien required.
Option to finance multiple pieces of equipment on one contract.
Cons
Can only apply online for transactions under $250,000.
Interest rates and qualification requirements not disclosed online.
Qualifications
Minimum credit score: Undisclosed.
Minimum time in business: Two years.
Minimum annual revenue: Undisclosed.
Our pick for
Food truck financing for working capital
You can use Headway Capital’s business line of credit to fund the ongoing expenses associated with running a food truck.
Food truck financing typically refers to a loan that’s used to buy a new or used food truck for your business. These loans are structured like other forms of equipment financing, in which the vehicle you purchase serves as collateral on the loan.
The term "food truck financing," however, may also incorporate any type of business loan that’s used to fund general food truck operations. These loans may be used for:
Purchasing or upgrading kitchen equipment.
Buying inventory and supplies.
Hiring staff and making payroll.
Improving the truck (e.g., signage, maintenance, repairs).
Covering day-to-day expenses.
How much does it cost to finance a food truck?
It can cost anywhere from $50,000 to $200,000 to purchase a new food truck. These custom trucks require a lead time to build. The cost of a used food truck, on the other hand, may range from $30,000 to $100,000. You should be able to use these trucks immediately, pending any required maintenance.
Whether you finance a new or used truck, interest rates on food truck loans can range from 5% to 36% APR. The business loan rate you receive will depend on the lender, the value of the truck, your down payment and your business’s qualifications.
Keep in mind that you may also need to cover soft costs, such as delivery, installation, warranties, taxes and insurance. Some lenders can offer food truck financing that incorporates these costs upfront.
Types of food truck financing
Here are some of the most common types of food truck financing:
Equipment financing
Equipment loans are designed specifically for the purchase of business machinery and equipment. You can use equipment financing to buy a food truck, as well as refrigerators, sinks, cooktops and other kitchen equipment.
With an equipment loan, the machinery that you’re purchasing serves as collateral. This built-in physical collateral reduces the risk for lenders — and as a result — they may be more flexible with qualification requirements.
SBA loans are partially guaranteed by the U.S. Small Business Administration and issued by participating lenders, like banks and credit unions. Both SBA 7(a) and 504 loans can be used for food truck financing.
These SBA loans are available in amounts up to $5 million ($5.5 million for eligible 504 loan projects) with repayment terms up to 10 years when used for equipment purchases. To qualify for an SBA loan, however, you’ll generally need good credit, strong finances and multiple years in business.
Business term loans
A business term loan is a lump sum of capital that you borrow from a lender and repay, over a specific period, with interest. Business term loans are available from traditional and online lenders. Maximum loan amounts, repayment terms and interest rates vary largely based on the lender and your business’s qualifications.
If you’re looking to buy a food truck, a dedicated equipment loan may be a better option. General term loans, however, can be a good option for financing inventory and supplies purchases, business improvements and day-to-day operations, among other uses.
Business line of credit
A business line of credit allows you to borrow from a set amount of funds and pay interest only on the funds you draw. Once you’ve repaid what you’ve borrowed, you can continue to draw on the credit line. Like term loans, business lines of credit are available from traditional and online lenders — and rates and terms vary.
Credit lines are best suited for the ongoing working capital needs of your food truck. They can also be good to have on hand in case of emergency expenses.
Microloans
Microloans are small loans — usually up to $50,000 — that are issued by nonprofits and community organizations. These lenders often focus their financing efforts on traditionally underserved businesses, such as women-owned businesses, minority-owned businesses and more.
Microlenders typically have flexible eligibility requirements and may be willing to work with startups or borrowers with bad credit. These loans can be a good option if you can’t qualify for more traditional financing, as long as your funding needs don’t exceed $50,000.
How to get a loan for a food truck
If you’re looking for a loan to purchase a food truck — or generally fund your business — here are some tips to help you find the right financing for your needs.
1. Evaluate your funding needs
Determine how much business capital you need and how you’re going to use it. If you plan to buy a food truck, consider if it should be a new or used truck. If you opt for a used truck, consider any additional equipment you’ll need to buy or renovations you’ll need to make.
2. Review your qualifications
Most lenders will consider your personal credit score, time in business and annual revenue when underwriting a loan application. Reviewing these business loan requirements ahead of time will give you a sense of where you stand before applying.
If you’re financing a food truck, you'll want to determine how much you can afford to put down. Although not all lenders require a down payment on a business loan, providing one, especially when it’s not required, can help you qualify for the most competitive rates and terms.
3. Find a vendor and get a quote
When financing a food truck, you’ll typically need to provide an equipment quote as part of your application. You should reach out to different vendors to get a quote for the type of truck you want. This will also allow you to compare vendors to see where you can get the best price.
🤓 Nerdy Tip
Some food truck vendors work with financing partners to help you get a loan or lease for a truck. Legion Food Trucks, based in California, for example, partners with Ford Financial. Because these lenders are familiar with the food truck industry and the vendor, they may offer flexible qualification requirements and expedited applications, among other possible benefits.
4. Compare food truck loan options
As you research and compare options, consider factors such as available loan amounts, repayment terms, interest rates, funding speed, application process and lender reputation.
Organizing your paperwork ahead of time can help expedite the business loan application process. Most lenders require basic information about you and your business, bank statements, tax returns and business financial statements.
When completing your application, you’ll want to make sure that you provide accurate and up-to-date documentation and answer every question as intended. This will reduce any back-and-forth between you and the lender, allowing you to get approved quicker.
You can finance a food truck through several different sources, including banks, SBA lenders and online lenders. You may also be able to get financing through food truck vendors. These vendors often work directly with lending partners to provide financing.
Repayment terms for food truck financing can range between one and 10 years, depending on the type of truck, your lender and your business’s qualifications. In general, a lender won’t offer terms that exceed the projected useful life of the truck.
It’s unlikely that you’ll find food truck financing that doesn’t require a credit check. Some lenders, however, will perform a soft pull of your credit history, which doesn’t impact your credit score.
If you have bad or thin credit, you may still be able to qualify for food truck financing. Because the food truck serves as collateral on the loan, lenders may be more flexible with their credit score requirements.
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including:
- Transparency of rates and terms.
- Flexible payment options.
- Fast funding times.
- Accessible customer service.
- Reporting of payments to business credit bureaus.
- Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.