Starting a food truck, just like any other business, requires a start-up investment. You need money to purchase your truck, get permits, and buy kitchen and food supplies.
There are several ways to raise the money to get your food truck venture off the ground. You can find investors, you can use cash on hand, or you can save up the money over time. For many owners though, the most convenient way to get a food truck going will be via a business loan.
Keep reading to find out how to get food truck financing.
1. Start With Market Research and a Business Plan
Before starting any business, you need to do your homework. You need to understand the local market in terms of competition, demand, pricing, costs, regulations, and more. You need to determine if your business idea is viable and what your opportunity will be for growth and success.
Then, you can build a business plan. This is an essential document that lenders or investors will look at to judge the credibility of your future business.
Fortunately, there’s much less risk involved with a food truck than a traditional restaurant. Your overhead costs will be far cheaper, you’ll have fewer employees, no dining room, etc. This will make it easier to get financed.
2. Small Business Loans
Can you finance a food truck through a traditional bank or SBA loan? The answer is yes, assuming your business plan is well-written and you have an acceptable credit score.
First, you’ll need to come up with a dollar amount of how much startup money you will need. Then, do some research on the various types of loans available and figure out which one will best meet your needs.
3. Private Investors
If you get turned down for a small business loan, you can seek private investors for food truck financing. There are multiple options here.
First, you can try to find an angel investor. They will provide the startup funds you need in exchange for equity in the business. They may also allow you to pay back your debt over time instead of taking equity.
There are also peer to peer investors. These are organizations that invest in small businesses they see potential in. They basically provide loans like a bank but aren’t a bank.
4. Crowdfunding Campaigns
Another option for food truck and food truck equipment financing is crowdfunding campaigns. This provide a great way to make money if you’re turned down by the bank and traditional investors. Crowdfunding relies on larger groups of investors all contributing small amounts to pool together the necessary funds.
Contributors can be rewarded with stock in the company, free products, etc.
5. Friends and Family
Can you finance a food truck without applying to banks or investors?
Yes, you still have options. Consider getting funds from people in your personal life. These include friends, family members, neighbors, and co-workers.
You should still provide a business plan to show them how serious you are and that their investment won’t be wasted. This may mean you need to finance a smaller or more modest food truck instead of the huge truck that costs more, or cut startup costs elsewhere.
So, Can You Finance a Food Truck?
Are you ready to start a food truck restaurant? If so, we can help. Now that you know the answer to financing your food truck, let’s talk about getting you on your way. Contact us today for a custom quote!