Updated
May 09, 2023 Food trucks have become a launching pad for successful and even world-renowned brick-and-mortar restaurants. But the benefit of a food truck business model goes far beyond the chef getting their feet wet in the food industry—it’s about the relatively low startup costs.
A food truck costs much less to renovate than a physical location and might even come pre-established. The operating costs are also substantially lower than a conventional restaurant operation, which can easily reach into the millions.
A food truck can potentially get started for $50,000, but $50,000 is still the lower end of the spectrum, according to OpenTable. Costs for permitting, staffing, renovations (if needed), utilities, and the truck itself can quickly spiral. You might find yourself needing food truck loans to get started.
Types of Food Truck Loans
Not all loans apply to all food truck operations. A personal loan operates differently from a small business loan, and the same goes for a business line of credit. Just because your food truck qualifies for a specific financing option doesn’t necessarily mean it’s a good move for your business’ financial future.
Also, depending on your business structure, partners, and investors, you might only qualify for less-than-ideal lending options. Your credit score, as well as previous business financial history, can play an essential role in which food truck financing options you are eligible for.
Before getting started, have a detailed and professional business plan in place. The quality of the business plan can send a message to any potential investors or lending officers. A project on the back of a napkin just isn’t going to cut it.
Explore more than one option from more than one provider to determine what loan is the best option for your new food truck business. Don’t be afraid to shop around, as interest rates and payment terms can vary significantly from one lender to another.
| Type | Details | Example |
| Personal Loans | Small, easy to obtain loans based on the applicant’s credit score | LightStream |
| SBA Loans | Small to large loans for applicants who have exhausted other financing options | SBA loan program |
| Microloans | Small loans targeted for underserved populations, offering additional support | Opportunity Fund |
| Business Term Loan | Loans for businesses that know exactly how much money they need | Lendio |
| Business Line of Credit | Small loans more tailored for existing businesses | American Express Business Blueprint |
| Equipment Loans | Small to large loans designed for good credit applicants making equipment purchases | Wells Fargo |
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Personal Loans
The majority of banks and credit unions offer some form of personal loans. Personal loans take your credit score and personal credit history into account for approval and interest rates. Depending on the financial institution, you can often apply online with fast approval.
A personal loan used to start a food truck can often be much easier to secure than a small business loan, especially if it’s for a new company. Rates can vary significantly based on creditworthiness, which means applicants with good to excellent credit tend to receive the most favorable rates.
Example Lender: LightStream
Rates (APR)
3.49% – 19.99%*
with AutoPay
Loan Amounts
$5,000 – $100,000
Credit Score
660+
LightStream is our choice as the best personal loan for excellent credit. Eligible borrowers can receive low rates and no fees. An added benefit of using LightStream is the company’s Rate Beat program in which they will beat any rate a competitor offers by 0.10 percentage points.** If you have excellent or good credit, LightStream is a great option.
- Credit score category: Excellent, good
- Soft credit pull to check rates: Not available
- Deposit time: As soon as the same day (conditions apply)
- Origination fee: 0%
- Late fee: None
- Discounts: 0.50% interest rate reduction for enrolling in autopay
- Repayment terms: 24 – 144 months depending on the loan purpose***
To compare other options, you can check out our guide to the best personal loans.
Small Business Administration (SBA) Loans
The SBA loan program reduces the risk to both lenders and borrowers seeking small business loans to start or expand a business. While the SBA doesn’t technically lend the money, it can help borrowers find appropriate lenders whose loans meet their strict guidelines.
Food truck owners are eligible for SBA loans to start a food truck so long as they have a vested financial (or time-spent) interest in a U.S.-based business and they exhaust all other financing options. Small business loans make sense for those food truck operators who were unable to access more conventional small business loans. An SBA loan can help you avoid risky financial obligations through a guaranteed and vetted loan provider. It offers a lender matching tool to help take some of the guesswork out of the process.
Microloans
Microcredit is typically under $50,000 but can be as small as a few hundred dollars. Microlenders usually target underserved populations, like immigrants, minorities, and female entrepreneurs. Microlenders tend also to provide other guidance or community support to their borrowers to help their small business along.
Microloans might make a good option for food trucks on the lower end of the budget: under $50,000. They could be an especially good option if you are from an underserved population and don’t have access to more conventional funding.
Example Lender: Opportunity Fund
A nonprofit microlender in the U.S., Opportunity Fund is geared toward women- and minority-owned small businesses. Its median loan is for $21,000, and the loan holders have a median household income of $38,000. It works with low-income families and business owners who don’t have access to more traditional financing options.
Business Term Loan
A business term loan can be a good option for food trucks that have a specific cost that needs financing. A term loan allows borrowers to take out a lump sum amount that will be repaid in full by the end of the agreed-upon term length.
Example Company: Lendio
Rates (APR)
As low as 6.00%
Loan Amounts
$5,000 – $2 million
Term Lengths
1 – 5 years
Lendio is the largest small business loan marketplace in the United States. Once you fill out the 15-minute online application, you’ll be able to choose between loans from over 300 leading lenders. These lenders include PayPal, Bank of America, and American Express. Funds can be made available in as little as 24 hours.
Business Line of Credit
Business lines of credit are often more challenging to access for small, startup businesses than for those with a proven financial track record. Because the line of credit is provided on an ongoing basis, the bank wants to ensure you are in good financial standing.
With that said, if you can get approval for a business line of credit, it’s one option that can help you through the unpredictable ups and downs of running a food truck. Did your fridge blow up and need replacing? Did you hire another staff member to get you through a busy month? A business line of credit is valuable as the short-term bridge between low and high cash flow. It’s comparable to a business credit card in this sense. They are typically under $50,000 and are not suitable for making large asset purchases or for managing long-term financial issues.
Example Lender: American Express Business Blueprint
Rates (APR)
7.00% – 69.00%
Loan Amounts
$1,000 – $250,000
Term Lengths
6, 12, or 18 months
American Express Business Blueprint offers business lines of credit. To be eligible, businesses must be active for at least 12 months with $50,000 in annual revenue.
Equipment Loans
Equipment loans for food trucks make perfect sense for startup operations. Why? Because you’re likely looking for funding to purchase and renovate the most significant expenditure in your project: the truck. Many banks that cater to businesses will have an equipment loan option. You’ll need to have good credit standing to apply and likely a down payment on the equipment—anywhere from 5 percent to 20 percent of the total cost. Equipment loans can also be offered through the dealer, although this is likely a rare occurrence for a food truck.
Example Lender: Wells Fargo
The finer details of the equipment loans offered through Wells Fargo are available as you work with the customer service agent. Under the details of their Commercial Transportation Financing, Wells Fargo provides loans with set terms and seasonal payment structures, among many other options.
Bottom Line
For food truck businesses just getting underway, the best bang for your buck is likely going through more conventional channels, including banks and credit unions.
Financing a food truck business doesn’t have to be as challenging as you think. Plan out your cash flow, budget for the foreseeable future, and explore which food truck loans make the most sense for your situation.
Recap of Food Truck Loans
| Type | Details | Example |
| Personal Loans | Small, easy to obtain loans based on the applicant’s credit score | LightStream |
| SBA Loans | Small to large loans for applicants who have exhausted other financing options | SBA loan program |
| Microloans | Small loans targeted for underserved populations, offering additional support | Opportunity Fund |
| Business Term Loan | Loans for businesses that know exactly how much money they need | Lendio |
| Business Line of Credit | Small loans more tailored for existing businesses | American Express Business Blueprint |
| Equipment Loans | Small to large loans designed for good credit applicants making equipment purchases | Wells Fargo |
*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.
**LightStream will offer a rate .10 percentage points lower than the rate offered on any competing lender’s unsecured loan provided that you were approved for that lower rate (with the same loan terms offered by LightStream) no later than 2 p.m. Eastern time two business days prior to loan funding. The Rate Beat Program excludes secured or collateralized loan offers from any lender, and the competitive offer must be available to any customer with a similar credit profile. Terms are subject to change at any time.
If you believe you have been approved by another lender for a lower qualifying rate, contact LightStream customer service. We will work with you to determine your Rate Beat eligibility and obtain the necessary documentation.
***Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of three years would result in 36 monthly payments of $303.99.