In your search and final decision, you'll want to consider a few factors that will influence your approach.To start, ask yourself questions like: What does your business need?What amount of funding do I need?Is the funding going to be used for something specific?What is the time frame for this capital?How can this amount, timing, and purpose be financed? What financing products work best?
What other questions should I be asking?
Can I qualify for any of these financing products?How would I describe my credit score?Can I present potential lenders with business financials or a business plan?Finally, you should consider your budget. If you fail to repay the funding efficiently, you might want to wait until you can afford it before applying for business funding solutions.You can narrow down your options to find a food truck loan that suits your business by going through this process.In order to find the right bank or lender to work with, you will need to decide which form of financing best suits your needs. This process will require you to talk to and compare loan options from multiple lenders to guarantee you are getting competitive rates and terms-and ultimately, your food truck business will be funded.
Understanding your alternatives:
Whether you are a bank or a finance company, you need to show them that you are prepared and understand the situation before they will loan you money. So, you should create a list of the investments your business made at the beginning. Besides the hotdog cart price, it includes the cost of licensing, permits, inspections, training, site rental, startup inventory, commissary expenses, auxiliary purchases, insurance, and other company expenses like bank accounts and cell phones.Your lending company may also want to make sure that your business will be viable. Consequently, they are interested in seeing that you have done an analysis of the market prior to investing. At hotdog.org, you'll find some useful statistics. It is essential to complete an extensive scouting and documentation process to determine the demographics of your potential customer market, the level of foot traffic, and your competitors' locations and numbers. Using hotdog.org to compare national market information could be of more value.If you're looking for a financier but don't know who to contact, we advise Dan Jackson at North Shore Leasing. Dan has extensive experience in our line of work. Indeed, his website includes a section dedicated to hot dog cart merchants. Here are the contact details for Dan:Dan Jackson, Nations Leasing Services Manager, Leasing Division 3543 Old Conejo Rd., Suite 105Newbury Park, CA 91320Corporate Phone: 866-222-2112Fax: 805-480-4960Bus: 805-480-1569Cell: email@example.comA food truck provides professionals and anyone interested in the foodservice industry with an easy way to get started. Increasingly popular are mobile food businesses, which are great for everyone involved-customers can get food delivered to their homes and restaurants, business owners are able to make their own schedule, and products can be tested and developed.Plus, you'll save on capital expenditures and overhead costs by not having a brick-and-mortar location. The food truck business still requires some type of financing.Even so, food truck financing will still require some capital despite its lower capital requirement than conventional restaurant financing. If you plan to run your food truck, you're going to need access to capital at some point, whether it's a small business loan or other product.We have provided this article to support your efforts in finding the best food truck financing.Here, we'll share some examples of how real food trucks financed their businesses, as well as break down your top options for food truck loans. Finally, we will discuss the best food truck financing options for you.Food Truck Financing Options Commonly Secured by New ProprietorsFinancing the machinery you need to run your food truck business is the best optionEspecially good for food truck owners who need flexible financing, lines of credit are the most reliableMicroloans from SBA: An affordable funding option with the smallest funding amountsFood truck credit cards are good for financing day-to-day purchases and supplemental borrowingYou can fund your food truck business with a crowdfunding campaign, which is best for serving a variety of financing needs, especially if you are connected to your local communityAccording to the U.S. Chamber of Commerce Foundation's study "Food Truck Nation," mobile food businesses generated revenues of approximately $2.7 billion in 2017. In 2014, the number was just $650 million, an increase of more than 400%.Where does this growth come from? Quite simply, from financing food trucks. Without food truck loans, the food truck industry would not be growing at this exponential rate.In order to determine what types of products will best meet your needs, you need to know what different products can offer your business.Among the many possible financing options for food trucks, you may want to start with these five:
Particularly when you're started out, and need financing for your truck, you may want to consider equipment financing as one of your food truck financing options. Additionally, if you need to purchase large equipment, such as ovens or stoves to outfit your truck, equipment financing will be one of your best options.This type of financing allows you to purchase business equipment that will act as collateral for a loan. As its name implies, equipment financing is a specific funding method. The financing of heavy equipment can include the purchase of ovens, semi-trucks, and automobiles.Some companies offer to cover up to 100% of the equipment's value with equipment financing loans. The term usually lasts through the expected lifespan of the equipment, with interest rates ranging between 8 and 30 percent.Due to the fact that equipment financing is, by definition, secured financing, you will have access to lower interest rates. In addition, these types of food truck financing often require limited paperwork and can fund within two days.Moreover, since equipment financing lenders are most interested in your equipment (and the value of the equipment), they will be more likely to work with you even if your qualifications aren't ideal. Therefore, this may be the best option for bad credit food truck financing.However, you may find equipment financing from traditional banks, but the qualification process will be much more difficult. In this case, you can turn to an online lender such as Balboa Capital or Currency Capital if you require a little more flexibility with terms, timing, and application processes.The loan amount can be as large as $2 million, and the interest rate starts at just 6%. Depending on your loan amount, you may be able to fund in as little as 24 hours if your food truck loan is under $150,000.Equipment financing could be one of your most affordable, convenient options for getting financing for a food truck.
Business Lines of Credit
You may consider business lines of credit if, on the other hand, your food truck financing needs are broader.You will be able to access a pool of funds from which you can draw capital as needed through a business line of credit. You will only be charged interest on what you actually end up spending when you repay your business line of credit.Further, after you repay the amount you spent, you can draw on your credit line again and again, whether you're upgrading your stove, purchasing additional trucks, or weathering the winter.With that said, business lines of credit are available for amounts up to $1 million and are typically available for periods up to five years. Generally, food truck financing products have interest rates ranging from 7% to 25%. If you work with the right lender and have the right qualifications, business lines of credit can be funded as quickly as one day.A business line of credit, like equipment financing, can accommodate average or bad credit, and in fact, this solution can be useful in building your credit score. Online lenders, on the other hand, offer easier applications, more flexible qualification requirements, and quicker funding than traditional banks.Fundation and Fundbox, two alternative lenders, offer competitive lines of credit you could use to fund your food truck business. A Fundation line of credit can be obtained for amounts between $20,000 and $150,000 over 18-month terms with interest rates starting at 8%. Normally, Fundation lends money within three business days, and you can borrow funds in one business day.You might consider a business line of credit as one of your top options if you're looking for working capital food truck financing, or simply want access to one of the most flexible financing products.
Are food truck loans another option you should consider? SMEs can benefit from SBA Microloans, which offer some of the lowest interest rates on the market and are available for smaller loans ($50,000 or less).SBA loans funds to non-profits in the community that lend the proceeds to small businesses in the community through this loan program. There are probably no better loan options than SBA Microloans for new startups and small businesses who are just getting started.In spite of this, the SBA sets a maximum term limit of six years for these loans, although much depends on which community bank you work with. These types of food truck financing generally have rates between 6.5% and 13%. Nonetheless, average SBA Microloan rates for the new fiscal year were 7.5%.In general, you can use an SBA Microloan for virtually any purpose, but you must meet stricter requirements if you wish to qualify for this type of loan. A business plan and strong financials will be required, as will the ability to provide collateral, or at least, a personal guarantee.Compared to other types of financing, especially those from online lenders, SBA Microloans will be much slower to fund because the process is more complex and lengthy.Yet, if you're considering SBA Microloans for the cheapest loan, you'll want to consider them.
Consider a business card as a great option to finance your food truck for smaller needs and everyday expenses. Though the smaller credit limits on business credit cards may not be sufficient to fully finance your food truck -- especially for purposes like buying the truck or large items of equipment -- these products are very helpful in many other situations.A credit card for your food truck business can be used to purchase inventory, small equipment, and software subscriptions, just like a personal card. For those who are just starting out in the food truck business, a business credit card is a good option, since you'll likely need only an average credit score to qualify. It is easy to apply for a credit card for your business online.You can earn points, cash back, or miles as you spend on business credit cards that offer ongoing rewards programs. If you choose to use a business credit card offering a 0% APR intro period, you can carry your balance from month to month without paying interest.As long as you pay your monthly minimum every month and clear your balance before the intro period expires, you could make a larger purchase and pay it off gradually without accruing interest. If you are looking for 12-month intro APRs, then you should consider Amex Blue Business Cash or Blue Business Plus.Having access to this simple and flexible financing product is always worthwhile since you can use it to cover day-to-day expenses, working capital, and building up your business credit.
What about Crowdfunding?
Finally, if you are looking for food truck financing, you might consider a crowdfunding campaign. A food truck is by definition a mobile fixture within a community, which makes crowdfunding an excellent method for truck owners to raise funds, especially from locals.Funding your food truck can be achieved by marketing your food truck on websites like Kickstarter and IndieGoGo and inviting customers, friends, family, and strangers to donate to your cause.A social procedure such as this is also a great choice for people with poor credit histories since donations are required. In the case of a non-qualifying loan or if you do not have time to build your credit, a crowdfunding campaign can be an appealing option for funding your food truck business.A successful crowdfunding campaign will need a lot of skill, creativity, and persistence-not to mention, advertising your campaign actively to attract supporters. No matter what stage you're at in your food truck business, crowdfunding is an option worth exploring, whether you're just getting started, wanting to grow, or simply seeking working capital.