Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Personal Loans Best Food Truck Loans Updated Nov 29, 2023 | 13-min read Written by Ben Luthi Written by Ben Luthi Expertise: Credit cards, consumer credit, student loans, personal loans, mortgage loans, investing, banking, budgeting, debt Ben Luthi is a Salt Lake City-based freelance writer who specializes in a variety of personal finance and travel topics. He worked in banking, auto financing, insurance, and financial planning before becoming a full-time writer. Learn more about Ben Luthi Reviewed by Natalie Slagle, CFP® Reviewed by Natalie Slagle, CFP® Expertise: Tax planning, employer benefit maximization, investments, education planning for young children, stock options, equitable household money management Natalie Slagle, CFP®, is a founding partner and financial advisor at Fyooz Financial Planning LLC. Natalie’s experience includes banking, tax preparation, financial planning, and wealth management. She currently resides in Portland, Oregon, with her husband and beloved small dog. Learn more about Natalie Slagle, CFP® Food trucks have become an attractive way for aspiring entrepreneurs and chefs to share their culinary gifts. Compared to a full-fledged restaurant, food trucks have lower startup costs and the freedom of location. They can also provide higher profit margins due to lower overhead and labor costs. But getting a food truck business off the ground isn’t cheap. The cost of a food truck can range from $50,000 to $175,000, depending on its condition, size, and equipment. You’ll also need to consider licensing and permit fees, insurance, supplies, point-of-sale system costs, labor, and more. Unless you have a sizable amount of cash to put into a food truck business, you may want to consider a food truck loan to help you finance the costs. Table of Contents Skip to Section Types of food truck loansHow to get a food truck loanFood truck loan FAQ Types of food truck loans There are several different ways you can finance your food truck operations. The right one for you will depend on factors such as how long you’ve been in business, your personal credit history, and your business plan. For brand-new business owners, for instance, traditional small business loans may be out of reach, leaving you with options like personal loans, microloans, and credit cards. However, if you’ve been running a truck loan business for some time and you’re looking to expand, you may be able to take advantage of small business term loans, lines of credit, and equipment loans. Understanding all your options, including their eligibility criteria, costs, and repayment terms, can help you determine which option is the best for you. Loan typeDetailsExample lendersBest forPersonal loanGenerally small loans approved based on the borrower’s credit historyLightStream, Upgrade, Upstart, AchieveNew business owners with a strong credit historyCredit cardRevolving credit line, possibly with rewards on everyday expensesCapital One, Chase, American ExpressOngoing operating expensesMicroloanGenerally small loans designed for new business owners and underserved communitiesOpportunity Fund, Kiva, U.S. Small Business Administration (SBA)Women, veterans, minorities, and business owners in low-income communitiesSBA loanSmall and large loans with favorable interest rates and repayment termsHundreds of approved SBA lendersEstablished businesses with a strong financial track recordBusiness term loanSmall and large loans with a variety of loan term optionsLendio, OnDeck, Funding Circle, Bank of AmericaBusinesses with at least one or two years of operating historyBusiness line of creditSmall and large revolving lines of credit with a variety of loan term optionsAmerican Express, BlueVine, Funding Circle, Wells FargoBusinesses with at least one or two years of operating historyEquipment loanSecured loan designed to finance a food truck or necessary equipment Lendio, National Funding, Fora Financial, Bank of AmericaBusinesses with at least one or two years of operating history As you consider your options, take time to understand each one, including the benefits and drawbacks. Additionally, shop around and compare several providers, looking at interest rates, payment terms, and other terms to ensure you get the right loan for your needs. “Speak with a business advisor at your local bank or credit union,” says Natalie Slagle, CFP. “Business advisors are trained in helping businesses secure financing by looking at business lending and personal lending options.” “Before sitting down with the business advisor, ask how that advisor is compensated,” advises Slagle. “Some banks pay their business advisors commissions based on the products they recommend to their customers. This doesn’t mean the advice is invalid, but it’s always good practice to know how the advice someone is giving you impacts their paycheck.” Personal loan If you’re just starting out, you’ll likely have difficulty qualifying for a business loan of any kind. However, some personal loan lenders, including banks, credit unions, and online lenders, allow you to use personal loan funds for business purposes. Depending on the lender, you may be able to borrow up to $100,000, and in most cases, repayment terms range from one to seven years. Interest rates max out at 36% with most top personal loans. Pros You don’t need a business credit history, revenue or operating history to get approved Loans are available to borrowers across the credit spectrum Most personal loans don’t require collateral Loan amounts are flexible Cons Some lenders charge an upfront origination fee, which can be as high as 12% of the loan amount If your credit isn’t in good shape, you may have a hard time securing affordable terms. You can’t use a personal loan to build a business credit history You’re on the hook for payments even if your business fails Examples LenderLendEDU ratingLoan amountsAPROrigination feeBest forUpgrade4.9$1,000 – $50,0008.49% – 35.99%1.85% – 9.99%Fair creditLightStream*4.8$5,000 – $100,0009.49% – 25.99%NoneLarge financing needsUpstart4.8$1,000 – $50,0005.20% – 35.99%0% – 12%Excellent creditAchieve4.8$5,000 – $50,0007.99% – 35.99%1.99% – 6.99%Payment date flexibility *Note that while there’s no restriction on using LightStream personal loans for business purposes, you cannot apply as a business, and funding and payments must be done with a personal bank account. To compare other options, you can check out our guide to the best personal loans. Credit card Business credit cards can be a good fit for everyday operating expenses for your food truck, giving you a revolving line of credit you can use, repay, and use again. You can qualify for a small business credit card, even if you haven’t started making money with your business. Many of the best business credit cards also offer rewards on your everyday purchases and other benefits, like 0% APR promotions and integration with accounting software. Pros You’ll get a revolving credit line you can use again and again You may be able to earn a sign-up bonus and rewards on your purchases You can avoid interest charges by paying your balance in full each month You can build business credit Cons Interest charges can be expensive if you carry a balance from month to month You won’t know what your credit limit is until you apply, and it may not be enough The best options require good or excellent personal credit You’re on the hook for payments even if your business fails Examples Credit cardFeaturesOngoing APRAnnual feeBest forInk Business UnlimitedLarge sign-up bonus1.5% cash back on every purchase0% APR on purchases for 12 months18.49% – 24.49%$0Flat cash-back rewardsBlue Business Cash Card from American ExpressDecent sign-up bonusUp to 2% cash back on every purchase0% APR on purchases for 12 months18.49% – 26.49%$0Spending less than $50,000 per yearInk Business CashLarge sign-up bonusUp to 5% cash back on select purchases0% APR on purchases for 12 months18.49% – 24.49%$0Flexible rewards ratesU.S. Bank Business Platinum CardIntroductory 0% APR on purchases and balance transfers for 18 billing cycles17.24% – 26.24%$0Time to pay down large expenses Microloan If your business is new or you’re a member of an underserved community—examples include minorities, women, veterans, and people in low-income areas—you may be able to qualify for a microloan. These loans are typically provided by nonprofit organizations and intermediary lenders that work with the SBA and can be a good option if you don’t have access to more conventional funding. Pros Microloans are available to borrowers across the credit spectrum Some lenders charge low interest rates or no interest at all You may not need any operating history to get approved Microloans often don’t require collateral Cons Most lenders offer smaller loans, maxing out at $50,000 or much lower You may need to meet other requirements, such as getting funding from your social circle May or may not help you build business credit You’re on the hook for payments even if your business fails Examples LenderLoan amountsAPRNotable featuresBest forAccion Opportunity Fund$5,000 – $250,0007.49% – 24.99%Terms of up to 60 monthsNo minimum credit scoreMust have 12 months of operating history and $50,000 in annual revenueBusiness owners with large financing needsKiva$1,000 – $15,0000%Terms of up to 36 monthsNo credit checkRequires you to obtain small loans from family and friends to qualifyBusiness owners with small financing needs SBA microloansUp to $50,0008% – 13%Terms of up to 72 monthsEligibility criteria and loan terms vary by lenderLoans have closing costsBusiness owners who want a longer repayment term SBA loans The SBA loan program reduces the risk to both lenders and borrowers seeking small business loans to expand a business. The federal agency works with approved lenders to provide affordable financing with flexible repayment terms. You can use the SBA’s lender match tool to find options in your area. The SBA 7(a) loan program offers term loans and lines of credit of up to $5 million, though some programs max out at $500,000. Repayment terms are typically 10 years or less. Pros SBA loans typically offer favorable terms and interest rates Loan amounts are flexible Smaller loans (typically $50,000 or less) don’t require collateral Can help you build business credit Cons SBA lenders typically require good credit and two or more years of operating history It can take between two and three months to get funding Larger loans require collateral Business term loan You can get a business term loan from a bank, credit union, or online lender and use it to expand your business or cover operating costs. Traditional banks and credit unions typically reserve their term loans for businesses with two or more years of operating history and a strong financial track record. In exchange, they offer affordable interest rates and flexible repayment terms up to 10 years. In contrast, online lenders typically have less stringent requirements, but they’ll charge higher interest rates and offer shorter repayment terms, which can be anywhere from a few months to a few years. Pros You can get a lump-sum payment for expenses both large and small Loans offered by banks and credit unions can be affordable and flexible Online lenders offer loans to business owners with lower credit scores and shorter operating histories Some loans don’t require collateral or a personal guarantee to get approved Can help you build business credit Cons Banks and credit unions have strict requirements to get approved. Even online lenders typically require at least some time in business and a minimum annual revenue Online business term loans can be expensive Some lenders may require you to repay the loan even if your business fails Examples LenderLoan amounts and termsAPRRequirementsBest forLendio$5,000 – $2 million6 months – 10 yearsStarting at 8.49% 1 year in business$8,000 in monthly revenueNewer businesses with large financing needsOnDeck$5,000 – $250,000Up to 24 monthsAverage of 60.90%1 year in business$100,000 in annual revenue625 credit scoreBusiness owners who can’t qualify for cheaper optionsFunding Circle$25,000 – $500,0006 months – 10 years7.49% – 28.99%2 years in business660 credit scoreEstablished businesses with large financing needsBank of America$10,000 – $100,0001 – 5 yearsStarting at 8.00%2 years in business$100,000 in annual revenueBank of America customers Business line of credit Business lines of credit function similarly to credit cards, giving you a revolving line of credit. That said, they typically offer much higher credit limits than business credit card issuers. You can get a business line of credit from a traditional bank, a credit union, or an online lender. Like term loans, you can generally get more favorable terms with a bank or credit union, albeit with higher eligibility criteria. In contrast, online lenders make it easier to get approved, but you may end up with higher costs and shorter repayment terms. Pros You’ll get ongoing access to a line of credit you can use repeatedly Many lenders don’t require collateral to get approved Banks and credit unions may offer favorable terms Newer businesses may be able to get approved with an online lender They can help you build business credit Cons You typically can’t get one with no business operating history Interest rates are typically variable and can fluctuate over time, and they can be expensive with online lenders Some lenders charge an annual fee Some lenders may require you to repay the loan even if your business fails Examples LenderLoan amounts and termsAPRRequirementsBest forAmerican Express$2,000 – $250,0006, 12 or 18 monthsMonthly fee of 3% – 27%One year in business$3,000 in monthly revenue660 credit scoreBusinesses with low revenueBlueVine$6,000 – $250,0006 or 12 monthsNot disclosedTwo years in business$40,000 in monthly revenue625 credit scoreBusiness owners who plan to repay quicklyFunding Circle$5,000 – $250,000variesNot disclosedTwo years in business; 660 credit scoreEstablished businesses with large financing needsWells Fargo$5,000 – $150,000; annually renewableStarting at Prime + 1.75%Varies, but owners with less than two years in business can get approved680 credit scoreBusiness owners with good credit or better Equipment loan If your main financing concern is the truck itself or for other equipment you need to run your business, an equipment loan can be a good fit. Unlike other financing options, which may include unsecured loans, equipment loans require that you use the vehicle or other item you’re purchasing with the loan as collateral. In other words, they work similarly to an auto loan You may be able to get an equipment loan through a bank, credit union, or online lender. Pros Often comes with lower interest rates compared to unsecured business loans Loan terms can be flexible, ranging from a few months to 10 years or more Options are available to business owners with less-than-stellar credit They can help you build business credit Cons If you miss payments, your truck or other equipment may be repossessed Lenders may require a down payment of up to 20% You can’t use proceeds for other business expenses Examples LenderLoan amounts and termsAPRRequirementsBest forLendio$5,000 – $5 million; 1 – 5 yearsAs low as 7.50%$50,000 in annual revenue; 520 credit score; no down paymentStartup food truck businessesNational FundingUp to $150,000; 2 – 5 yearsNot disclosed6 months in business; fair credit score or better; no down paymentBusiness owners who prefer to lease instead of ownFora Financial$5,000 – $1.5 million; 2 – 7 years2.80% – 10%6 months in business; $180,000 in annual revenue; 500 credit scoreHigh-revenue businesses who want low interest ratesBank of America$25,000 and up (no maximum); up to 5 yearsStarting at 7.50%2 years in business; $250,000 in annual revenueHigh-revenue businesses that bank with Bank of America How to get a food truck loan If you’re ready to pull the trigger on financing for a food truck, it’s important to carefully consider your situation and goals, as well as your potential options, to ensure you get the best deal. Here are some steps to help you through the process: Check your credit: While it’s possible to obtain some food truck loans even if your credit needs some work, many require good or excellent credit to get approved or secure favorable terms. You can check your credit score for free at annualcreditreport.com to get an idea of where you stand and whether it makes sense to take some time to improve your credit first.Calculate your costs: To avoid borrowing too little or too much, do some research on what costs you’ll incur as you get started with your food truck business or expand it. Be realistic with your estimates and try to avoid overspending on unnecessary expenses.Determine which type of loan is best: Take a look at the different types of food truck loans to gauge which one would work best for your needs. Some factors to consider include eligibility criteria, disbursement methods, loan amounts, interest rates, fees, and repayment terms.Get prequalified: Once you determine the right type of loan, research lenders and see if you can get prequalified before you submit an application. The prequalification process doesn’t impact your credit score, but it can give you a general idea of your approval odds and even some rate quotes.Submit an application: If you can’t find lenders that offer prequalification, submit an application with at least a few, so you can compare loan terms. If prequalification is an option, select a lender to apply directly through their website. You’ll typically need to provide information about yourself and, if it’s a business loan, your business.Provide documentation: If you’re applying for a personal loan, you may need to provide a pay stub or tax returns to prove your income and a copy of your photo ID. If it’s a business loan or line of credit, you may also need to share articles of incorporation, an employer identification number, and a business plan.Review the offer and sign the agreement: If the lender approves your application, you’ll generally be able to view the offer before signing anything. Read the loan agreement carefully, then sign it electronically.Wait for funding: Depending on the type of loan and the lender, you may receive your loan funds the same day you sign the contract, or it may take up to a week. Check funding times before you apply so you know what to expect. Ask the expert: What financial implications of starting a food truck business should aspiring entrepreneurs consider as they explore food truck loans? Natalie Slagle, CFP Whenever you start a business venture, it’s best to reduce your personal expenses as much as reasonably possible as you work to get your business off the ground and running. This may mean taking fewer vacations, spending less on restaurants, or reducing monthly rent expenses.We advise our clients to have two years of personal expenses saved whenever they start a new business. Alternatively, if you are in a relationship where the other person has a steady paycheck, ensure your personal expenses are covered by that person’s pay for the first year or two. Having an adequate personal financial runway is key to a successful start-up! Food truck loan FAQ Is it easier to get a loan for a food truck or a traditional restaurant? It’s generally easier to get approved for a food truck loan than financing for a traditional restaurant. Because restaurants typically have lower profit margins, they’re at a greater risk of failure than a food truck. They also have much higher startup costs, so you’d need to borrow more money, which may rule out some of the food truck loan options like personal loans, microloans, and credit cards. Can I use my home equity to fund my food truck business? Yes. Mortgage lenders typically don’t set restrictions on how you can use funds from a home equity loan, home equity line of credit, or cash-out refinance loan. So, if you have significant equity in your home, you could tap some of it to get the capital you need to get your food truck business off the ground. Do I need a business plan to apply for a food truck loan? If you’re applying for a business loan, especially through a bank, credit union, or the SBA, you can expect to need a strong business plan to get approved. Food trucks have a relatively high failure rate of 60% after three years. As a result, lenders will want to gather as much information as possible to determine your likelihood of success. What’s the minimum credit score needed for a food truck loan? Food truck loans are available to business owners across the credit spectrum. However, some of the best options generally require good or excellent credit, and if you want to maximize your savings on interest and fees, you’ll want a score in the 700s. Do I need a down payment for a food truck loan? Some food truck loans require a down payment of up to 20%, but it’s possible to get one without a down payment requirement. Are grants available for food truck entrepreneurs? Yes, depending on your situation, you may qualify for a grant to help you finance your food truck business. In particular, you may be eligible if you belong to an underserved community or live in a rural area. Can I secure a loan if my food truck business is seasonal? Yes, certain types of food truck loans are still available if your business is seasonal. Some options don’t require an in-depth look at your operations. Even among lenders that require a business plan and forecasts, you may still be able to qualify if your seasonal revenue is sufficient to meet the lender’s requirements.