Best Food Truck Loans

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. 

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Types of food truck loans

You have several ways to finance your food truck operations. The right one for you will depend on 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 type	Details	Lenders incl.
Personal loan	Small loans approved based on borrower’s credit history	LightStream Upgrade Upstart
Credit card	Revolving credit line Earn rewards on everyday expenses	Capital One Chase American Express
Microloan	Small loans for new business owners & underserved communities	Opportunity Fund Kiva U.S. Small Business Admin. (SBA)
SBA loan	Small & large loans with favorable interest rates & repayment terms	Hundreds of approved SBA lenders
Business term loan	Small & large loans with a variety of term options	Lendio OnDeck Funding Circle
Business line of credit	Small & large revolving lines of credit with a variety of loan term options	American Express BlueVine Funding Circle
Equipment loan	Secured loan to finance food truck or necessary equipment	Lendio National Funding Fora Financial

As you consider your options, take time to understand each one, including the benefits and drawbacks. Shop around and compare several providers, looking at interest rates and other terms to ensure you get the right loan for your needs.

Our expert recommends

Natalie Slagle

CFP®

Speak with a business advisor at your local bank or credit union. 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 they’re compensated. 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 affects their paycheck.

Personal loan

Best for

New business owners with a strong credit history

What it is

If you’re just starting out, you might 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

Lender	Loan amts.	APR	Orig. fee?
Upgrade	$1K – $50K	8.49% – 35.99%	✅
LightStream*	$5K – $100K	9.49% – 25.99%	❌
Upstart	$1K – $50K	5.20% – 35.99%	✅
Achieve	$5K – $50K	7.99% – 35.99%	✅

To compare other options, you can check out our guide to the best personal loans.

Credit card

Best for

Ongoing operating expenses

What it is

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 card	Features	Best for
Chase Ink Business Unlimited	Large signup bonus 1.5% cash back on every purchase 0% APR on purchases for 12 months	Flat cash-back rewards
Blue Business Cash Card from American Express	Decent signup bonus Up to 2% cash back on every purchase 0% APR on purchases for 12 months	Spending less than $50,000 per year
Chase Ink Business Cash	Large signup bonus Up to 5% cash back on select purchases 0% APR on purchases for 12 months	Flexible rewards rates
U.S. Bank Business Platinum Card	Intro 0% APR on purchases and balance transfers for 18 billing cycles	Time to pay down large expenses

Microloan

Best for

Women, veterans, minorities, and business owners in low-income communities

What it is

If your business is new or you’re a member of an underserved community, you may qualify for a microloan. 

These loans are typically provided by nonprofit organizations and intermediary lenders that work with the SBA and can be a solid 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

Lender	Loan amts.	APR* + Max loan term	Best for
Accion Opp. Fund	$5K – $250K	8.49% – 24.99% 60 mos.	Large financing needs Exp. business owners
Kiva	$1K – $15K	0% 36 mos.	Small financing needs  Those who can obtain small loans from family & friends
SBA microloans	Up to $50K	8% – 13% 72 mos.	Longer terms Those who can pay closing costs

SBA loans

Best for

Established businesses with a strong financial track record

What it is

The SBA loan program reduces the risk to 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, but some programs max out at $500,000. Repayment terms are typically 10 years or less. 

Pros

• SBA loans offer favorable terms and interest rates

• Loan amounts are flexible

• Smaller loans ($50,000 or less) don’t require collateral

• Can help you build business credit

Cons

• 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

Best for

Businesses with at least one or two years of operating history that want access to a lump sum

What it is

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 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 of up to 10 years.

Many online lenders 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 large and small expenses

• Loans from 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

Lender	Amts. + terms	APR	Best for
Lendio	$5K – $2M 6 mos. – 10 yrs.	Start at 8.49%	Newer biz (at least 1 year & $8K in mo. rev.)
OnDeck	$5K – $250K Up to 24 mos.	8.50% – 99.00%	Those that can’t qualify for cheaper options
Funding Circle	$25K – $500K 6 mos. – 10 yrs.	7.49% – 28.99%	Biz at least 2 years old & 660 credit score
Bank of America	$10K – $100K 1 – 5 yrs.	Start at 8.00%	BoA cust. w/ at least 2 years in biz & $100K annual rev

Business line of credit

Best for

Businesses with at least one or two years of operating history that need ongoing access to funds

What it is

Business lines of credit function like credit cards, giving you a revolving line of credit, but they can 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 often 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

Lender	Loan amts. + terms	APR*	Best for
American Express	$2K – $250K 6 – 18 mos.	Mo. fee of 3% – 27%	Biz w/ at least $3K mo. rev., 1 yr. in biz, & 660 credit score
BlueVine	$6K – $250K 6 or 12 mos.	Starts at 6.20%	Biz owners w/ at least $40K mo. rev., 2 yrs. in biz, & 625 credit score
Funding Circle	$5K – $250K Terms vary	N/A	Biz w/ at least 2 yrs. in biz & 660 credit score
Wells Fargo	$5K – $150K Can renew each yr.	Starts at prime + 1.75%	Biz owners w/ at least 680 credit score

Equipment loan

Best for

Businesses with at least one or two years of operating history that need financing for a truck or other equipment

What it is

If your main financing concern is the truck itself or other equipment, an equipment loan might be suitable. 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 like 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

Lender	Loan amts. + terms	APR*	Best for
Lendio	$5K – $5M 1 – 5 yrs.	Start at 7.50%	Startups w/ at least $50K annual rev. & 520 credit score No down payment
National Funding	Up to $15K 2 – 5 yrs.	N/A	Owners w/ at least 6 mos. in biz & fair credit who prefer to lease, not own No down payment
Fora Financial	$5K – $1.5M 2 – 7 yrs.	2.80% – 10%	Owners w/ at least 6 mos. in biz, $180K annual rev., & 550 credit score
Bank of America	$25K+ (no max) Up to 5 yrs.	Start at 7.50%	BoA cust. w/ at least 2 yrs. in biz & $250K annual rev.

How to get a food truck loan

If you’re ready to pull the trigger on financing for a food truck, consider your situation and goals, as well as your potential options, to ensure you get the best deal. Here are eight steps to help you through the process:

1. Check your credit: It’s possible to obtain a food truck loan even if your credit needs work, but many require good or excellent credit to get approved or secure favorable terms. Checking your credit score with your bank or credit card company, or one of the major credit bureaus, can give an idea of where you stand and whether it makes sense to take time to improve your credit first.
2. Calculate your costs: To avoid borrowing too little or too much, research 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.
3. Determine which type of loan is best: Consider the different types of food truck loans to gauge which one would work best for your needs. Factors to consider include eligibility criteria, disbursement methods, loan amounts, interest rates, fees, and repayment terms.
4. Get prequalified: Once you determine the right type of loan, research lenders and see if you can prequalify before you submit an application. The prequalification process doesn’t affect your credit score, but it can give you a general idea of your approval odds and even several rate quotes.
5. Submit an application: If you can’t find lenders that offer prequalification, submit an application with a few, so you can compare loan terms. If prequalification is an option, select a lender, and apply through its website. You can expect to provide information about yourself and, if it’s a business loan, your business.
6. 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.
7. Review the offer and sign the agreement: If the lender approves your application, you should view the offer before signing anything. Read the loan agreement, and if the terms look right, sign it.
8. Wait for funding: Depending on the type of loan and the lender, you may get your loan funds the 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

Natalie Slagle

CFP

Whenever you start a business venture, it’s best to reduce your personal expenses as much as 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 before starting a new business. Or if you’re in a relationship where the other person has a steady paycheck, ensure that person’s pay can cover your expenses for the first year or two. Having an adequate personal financial runway is key to a successful startup.

Food truck loan FAQ

Is it easier to get a loan for a food truck or a traditional restaurant?

It’s often easier to get approved for a food truck loan than financing for a traditional restaurant. Because many restaurants 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 several food truck loan options, such as personal loans, microloans, and credit cards.

Can I use my home equity to fund my food truck business?

Yes. Most mortgage lenders don’t restrict 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 failure rate of 60% after three years, so 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 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 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.