Best Food Truck Financing and Loans
Best Food Truck Financing and Loans
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Max loan amount
$750,000
Min. credit score
700
Pros
- Competitive interest rates.
- Longer repayment periods.
- Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
- Fee discounts available for veteran-owned businesses.
Cons
- Charges an origination fee.
- Prepayment fees may apply to early repayments.
- Can be slow to fund.
- Application cannot be completed online.
Bank of America - Equipment loan
Best for Low interest food truck financing
Max loan amount
$750,000
Min. credit score
700
Pros
- Competitive interest rates.
- Longer repayment periods.
- Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
- Fee discounts available for veteran-owned businesses.
Cons
- Charges an origination fee.
- Prepayment fees may apply to early repayments.
- Can be slow to fund.
- Application cannot be completed online.
Max loan amount
$150,000
Min. credit score
600
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing: National Funding offers only short-term loans and equipment financing/leasing.
- Charges an origination fee.
National Funding - Equipment financing
Best for Food truck startup loans
Max loan amount
$150,000
Min. credit score
600
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing: National Funding offers only short-term loans and equipment financing/leasing.
- Charges an origination fee.
Max loan amount
$10,000,000
Min. credit score
620
Est. APR
5.99-18.00%
Pros
- Funding available within 48 hours.
- Competitive rates and repayment terms.
- Flexible payment options available, including deferment options for certain industries.
- No down payment required.
- Can be used to build business credit.
Cons
- Must have good credit to qualify for no prepayment penalties.
- Charges an origination fee.
JR Capital - Equipment financing
Best for Fast food truck financing
Max loan amount
$10,000,000
Min. credit score
620
Est. APR
5.99-18.00%
Pros
- Funding available within 48 hours.
- Competitive rates and repayment terms.
- Flexible payment options available, including deferment options for certain industries.
- No down payment required.
- Can be used to build business credit.
Cons
- Must have good credit to qualify for no prepayment penalties.
- Charges an origination fee.
Max loan amount
$250,000
Min. credit score
580
Est. APR
6.50-34.99%
Pros
- Can fund within one to two business days.
- No prepayment penalty.
- Flexible repayment options: monthly, quarterly, annually or semiannually.
Cons
- Charges an origination fee.
Triton Capital - Equipment financing
Best for Food truck financing for bad credit
Max loan amount
$250,000
Min. credit score
580
Est. APR
6.50-34.99%
Pros
- Can fund within one to two business days.
- No prepayment penalty.
- Flexible repayment options: monthly, quarterly, annually or semiannually.
Cons
- Charges an origination fee.
SBA 7(a) loan
Best for SBA loans for food trucks
Max loan amount
$5,000,000
Min. credit score
650
Est. APR
10.50-14.00%
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Collateral is typically required.
- Longer processing times than online lenders.
SBA 7(a) loan
Best for SBA loans for food trucks
Max loan amount
$5,000,000
Min. credit score
650
Est. APR
10.50-14.00%
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Collateral is typically required.
- Longer processing times than online lenders.
U.S. Bank - Equipment financing
Best for Covering upfront costs
Max loan amount
$1,000,000
Min. credit score
Undisclosed
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.
U.S. Bank - Equipment financing
Best for Covering upfront costs
Max loan amount
$1,000,000
Min. credit score
Undisclosed
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.
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
Headway Capital - Line of credit
Best for Food truck financing for working capital
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
What is food truck financing?
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
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.
» MORE: Equipment loan calculator
5. Prepare and submit your application
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.
Frequently asked questions
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.
Last updated on May 22, 2024
Methodology
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.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
Wondering if you qualify?
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.
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