Best Food Truck Loans Explained
In this section, we’ll delve into each of the food truck loans outlined, in brief, above. This will provide you with a greater understanding of these loan types and insight into the rationale behind our choice of recommended lenders.
Equipment financing can help you acquire the assets you need to help you run your business for years to come. You may choose to start with basic equipment or to go all out and purchase the latest equipment on the market. Some lenders will cover the entire value of your assets, however, they may reclaim the items if you fail to repay your loan.
When starting a food truck business, most of your expenses will likely come in the form of equipment purchases. You will need to purchase a vehicle and all the tools you need to create your tasty meals. If you are worried about making it through your initial year, you may want to start by leasing your equipment.
Fundera has several financial solutions, such as invoice factoring and SBA loans. Fortunately, it specializes in equipment financing, and provides advice on what you’ll need for your food truck business. It is also willing to assist startup companies.
The last thing you want to do is to continue paying for an extended loan, while only using part of the loan funds. A business line of credit is an alternative to an extended loan. A line of credit can help you meet your daily expenses, and what’s great is that you will only need to repay what you use. A business line of credit is like a revolving loan, as the full loan amount becomes available again as long as you maintain your loan payments.
A business line of credit is a great option for anyone starting a food truck business. It can help you make your daily payments and purchase the food ingredients you need from your local market. Once you make money back from your sales, you can repay the loan. A business line of credit can help you when you have a slow period and need money to tie you over.
BlueVine is our preferred lender for a business line of credit, offering up to $250,000. BlueVine has competitive rates, so you won’t need to worry about repaying more than you can afford. You’ll just need to check if this loan provider is available in your state.
Some government entities provide grants for struggling food truck companies. Small Business Administration (SBA) loans are offered to approved lenders. However, these lenders use strict guidelines to decide who qualifies for a SBA loan. The government will guarantee up to 85%, however, you may need to make a downpayment, depending on the amount you wish to borrow.
You can use the money from this loan type in two ways. You can use the money as startup capital to purchase all the items you need. Alternatively, you can expand your current business and add, for example, extra vehicles or recruit more chefs.
SmartBiz uses innovative technology to help businesses find the most suitable loan terms for their enterprise. SmartBiz is an approved SBA lender that gives you access to government grants for food truck businesses. SmartBiz has a high approval rate and a fast application process.
A merchant cash advance uses the latest computer and financial tech. This new technology links lump-sum loans to credit and debit card machines. Whenever you make a sale through the device, the lender takes a small percentage of the sale as payment. A lender will usually require a minimum number of monthly sales from your business.
As a food truck business owner you will be dealing with food sales on a daily basis, so you can expect most of your customers to pay with their bank cards. You can take advantage of this by applying for a merchant cash advance. This loan type offers a quick fix with flexible payment options.
If you’re already a merchant member of Square Capital, you can make use of its merchant cash advance feature. If not, you can register as a merchant member, so that you can receive funds, from this lender, for your food truck business. If you maintain your payments the lender may offer you additional loan types.
Keeping a food truck running can be an unexpectedly costly affair and even the best-planned business might need financial assistance on occasion. Short-term loans are ideal for food truck businesses because they’re easy to get and won’t take many years to repay.
Fora Financial is a great option when looking for a reliable short-term loan lender with a reliable lending history. They offer flexible payments and good terms that allow quick repayment. If a company needs more financial assistance upon paying off its debt, Fora will provide further assistance.
It’s easy to apply for a short-term loan from Fora Financial - you just fill out a one-page application, submit three months of bank statements, and receive an approval within 24 hours.
Upon approval, the loaned funds will be deposited in the company’s bank account in approximately 72 hours.