Food Truck Financing: Best Business Loan Options to Consider
Opening a food truck can be a costly adventure. Between the truck itself, licensing and permit fees, and kitchen supplies, costs can add up quickly. If you don’t want to tap into savings, food truck financing can help you get started.
Reviewed by: Sarah Brooks, Personal Finance Writer and Editor
Many or all of the products featured here are from our partners who compensate us. This may affect which companies we write about and where the company appears on a page. However, any analyses, or reviews expressed in this article are those of the author’s alone, and have not been approved or endorsed by any partner.
Getting a food truck up and running is a costly endeavor, with average expenses ranging from $50,000 to $250,000 or more. Since food trucks don’t always operate year-round, cash flow can become an issue once the truck is up and running. Small business loans can help you both get your food truck off the ground and provide financing for the daily expenses that come with operating a food truck.
Our team of financial experts found the best lenders for food truck financing. Whether you’re just getting started or are battling poor credit, we’ve found a food truck loan to meet your needs.
When deciding between food truck loans, there are a few things to consider. In this review, we highlight the rates, fees and terms of each leder and explain what makes them a good option. We also share potential downsides of each lender, and provide a rating methodology you can use to select the best option for your needs.
Best Food Truck Financing Options for 2023 - Full Overview
American Express Business Blueprint™ - Best for Fair Monthly Revenue Requirements
Monthly fee: 3-9% for 6 month loans, 6-18% for 12-month loans, 9-27% for 18-month loans
Loan amounts ranging from $2,000 to $250,000
No prepayment penalties and no origination fees
Convenient application process
Pros & Cons
Fair monthly revenue requirements
Excellent customer service
Lending decision made in real time
Rates can be high
Personal guarantee required
Fee structure can be confusing
American Express Business BlueprintTM program hosts the American Express® Business Line of Credit product. Rather than taking out a lump sum, a line of credit allows you to draw on the amount you need, pay it back, and use it again. American Express Business Blueprint offers a straightforward, online application and looks at your financial situation in real time. Fees are straightforward, and American Express does not charge any prepayment penalties.
Main Features Food truck businesses can get a business line of credit from American Express between $2,000 - $250,000. Loan terms are six, 12, or 18 months, and payments are made monthly. For six-month loans, rates range from 3-9%; for 12-month loans, 6-18%; and for 18-month loans, rates range from 9-27%. To qualify, you’ll need a minimum credit score of 640, have been in business for one year, and have an average monthly revenue of at least $3,000. However, all businesses are unique and are subject to approval and review.
American Express Business Line of Credit is best for food truck businesses who may not meet the monthly income requirements of many other online lenders. While many lenders require at least $10,000 in monthly revenue, American Express Blueprint requires an average monthly revenue of at least $3,000. If you’re in need of capital to pay for inventory, purchase a second truck, or cover expenses during slow seasons, this lender is worth looking into.
National Funding - Best For Food Truck Equipment Financing
National Funding offers equipment loans you can use to cover the cost of new or used equipment for your food truck. Depending on your finances and unique situation, you can secure up to $150,000 for ovens, ranges, grills, freezers, refrigerators, sinks, and anything else you need to run your venture.
Main Features National Funding’s equipment loans go up to $150,000 with repayment terms between two and five year years. The pay rate starts at 1.10 and you’ll pay back what you borrow every month. To qualify for an equipment loan, for example to fund a bakery equipment, you’ll need a minimum credit score of 575, at least six months of business history, and $250,000 or more in annual revenue.
An equipment loan from National Funding can be a great choice if your food truck earns at least $250,000 in annual revenue and you would like to buy new equipment or upgrade what you currently have. Since you can prequalify without any affect to your credit, you have nothing to lose.
Industry best factor rate for MCA - as low as 1.10
APR for the Line of credit product starts at 35%
Flexible repayment terms up to 16 months
Get funding in as little as 24 hours
Check your rate with a soft credit pull
Pros & Cons
Large loan amounts
Easy online application
Fast lending decision and funding times
Positive customer reviews
No collateral required
Startups will not qualify
Rates not disclosed on website
Backd was founded in 2018 and has since funded more than $1 billion to over 10,000 small businesses. They appeal to businesses who do not want to wait months to get traditional financing through banks or other online lenders. In addition, they work specifically for your business and tailor the loan to fit your needs. If you need working capital to grow your food truck business, Backd could be the lender for you.
Main Features Backd offers working capital loans ranging from $10,000 to $2 million with terms of 16 months. Payments are flexible and can be made daily, weekly, or semi-monthly. Backd also offers a business line of credit that can be used to fund your food truck business. There are no specified terms with a line of credit, and you can borrow up to $750,000 if approved. To qualify for either product, you need to be in business for at least one year and have a minimum annual revenue of $100,000. You also need to be based in the U.S. and have a business bank account.
If you need a large loan amount with flexible terms, Backd is here to help. The online application takes just a few minutes to fill out and you’ll get a lending decision almost instantly.
Excellent customer reviews on independent review sites
Pros & Cons
Simple online application
Fast decision and funding times
Many lenders and products to choose from
A representative walks you through the process
Bad credit is accepted
High annual revenue requirements
Higher rates for those with poor credit
Lendzi was founded in 2020 and offers seven different types of small business loans that food truck businesses may qualify for. If you have a high revenue fod truck and you have been denied a loan elsewhere, Lendzi can help get you the financing you need. They are a direct lender and a partner with more than 75 other lenders, making it so the odds are in your favor of qualifying for a competitive small business loan, even with bad credit.
Main Features Lendzi is an excellent lender to work with whether you’ve struggled to get a loan before or you have near-perfect credit. They work with all types of businesses and all types of financial situations. Past and present customers highly recommend Lendzi, and that is evident based on their 2,000 5-star reviews. The best loan for borrowers with bad credit is the working capital loan. To qualify, you need a credit score of just 500, six months of business history, and an annual revenue of $180,000. These loans max out at $400,000 and have terms between three and 15 months. Factor rates start at just 1.15.
Lendzi is worth looking into for your food truck business loan whether you need to borrow a small amount or a large lump sum. They work with borrowers with bad credit, those who have been denied a loan elsewhere, and those with excellent credit. A representative will call you once you submit your application to discuss details of your business and go over which loans you qualify for, making this process as simple and straightforward as possible.
GoKapital was founded in 2013 and offers six different types of small business financing, including startup loans. Startup loans are best-suited for businesses with less than one year of business history and low annual income. Because the income requirement is low, GoKapital will take a close look at your personal credit score for this type of funding. Here are 8 ways to increase your business credit score.
Main Features A startup loan from GoKapital ranges from $20,000 to $500,000 with terms from one to five years. This money can be used to purchase a new food truck, hire employees, invest in quality equipment, and more. Interest rates start at just 6% and no business history is required. GoKapital does require a minimum credit score of 700, though, in addition to at least $50,000 in annual income.
If you need to purchase a food truck or are looking for additional funding to market and grow your business, a startup loan from GoKapital can help. Income requirements are low, but you do need to have a strong credit history to qualify for this type of funding. GoKapital does not do a hard credit pull during the application process, so if you meet the requirements, we recommend applying and seeing what the company has to offer.
Unavailable in Nevada, North Dakota and South Dakota
2.9% fee added if paying back by credit card
Rates can be high
Bluevine offers a business line of credit that you can use for food truck financing. A line of credit can be the difference between keeping a food truck or trailer business afloat versus going under. If the truck is experiencing slow months or in an off season, a line of credit from Bluevine can make it possible to afford expenses such as staff, inventory, and truck maintenance until business picks up again. Bluevine also offers business banking to help customers keep more of their banking business in one place.
Main Features In order to qualify for a Bluevine line of credit, business owners must have a credit score of at least 625 and be in business for at least six months. Their business must also have $120,000 in minimum annual revenue. Rates can be as low as 4.8% for up to $250,000 worth of funding. Bluevine allows borrowers to take out money through their line of credit and pay back each draw with fixed monthly or weekly payments over the course of six to12 months.
Bluevine is a good choice for food truck businesses looking for a line of credit with lower rates than competitors and the ability to pay back the draw within one year. They also allow bills to be paid automatically with a credit card, helping food truck entrepreneurs earn rewards or cash back, a unique feature to Bluevine.
Fundbox offers both term loans and lines of credit for small business financing. Funds are available as soon as the next business day on approved loans, and it’s fairly easy to qualify. Loans can be used for financing vehicles and machinery, making it a great choice for food truck owners.
Main Features Fundbox offers businesses term loans and lines of credit up to $150,000. To qualify, you need a minimum credit score of 600, be in business for at least six months, and have $100,000 or more in annual revenue. Term loans have a 24 or 52 week repayment option, and lines of credit offer 12 or 24 week repayment plans each time you draw on the line. Qualified borrowers can enjoy rates starting at 4.66% on lines of credit and 8.33% on term loans.
Compared to competitors, Fundbox offers faster funding times and less strict requirements to qualify. This makes it a good option for food truck businesses in need of capital fast but may not yet have strong business credentials.
Founded in 2007, Biz2Credit has helped more than 225,000 business owners obtain more than $7 billion in financing. The two main types of financing they offer for small businesses are working capital and term loans. However, they also specifically offer restaurant equipment financing, perfect for financing a food trailer.
Main Features Biz2Credit offers equipment financing for startups from $25,000 to $100,000. For established businesses, you can get a loan for more than $100,000 but need to be in business for at least 13 months. As new food truck equipment can be used as collateral, equipment financing tends to have lower rates and longer terms. Terms typically extend from 7-10 years, compared to only 2-5 years with unsecured lines of credit.
Equipment financing can be very useful for food truck business owners, with Biz2Credit as a top choice for both startups and food trucks that are already established.
Loan features - Consider loan amounts and how long you’ll have to repay the loan.
Application process - Look at how invasive the loan application process is, including documents needed and how long it takes to have the funds in hand.
Interest rates and fees - Be sure to look for the lowest rates you can find to save in interest. Inquire about any fees associated with borrowing funds, including origination fees and prepayment penalties.
Qualification process - When looking at how to get a loan for a food truck, each lender will likely have their own minimum credit score, annual revenue, and business history requirements.
Customer support - Look for lenders that are easy to contact via phone, live chat, or email.
Online user reviews - We looked at what other customers had to say on trustworthy review sites such as Trustpilot.
Perks and bonuses - Consider specified service offerings like payment flexibility, advertising transparency, and advanced technology.
Main Features of The Best Food Truck Financing Options
Our experts have analyzed the following companies and their lending requirement metrics including minimum credit score, minimum time in business, minimum annual revenue, loan amounts available, and interest rate ranges.
Min. Credit Score
Min. Time in Business
American Express Business Line of Credit
Average monthly revenue: at least $3,000
$2,000 - $250,000
3-9% for 6-month loans; 6-18% for 12-months loans; 9-27% for 18-month loans
Up to $150,000
Factor rate starts at 1.1
Up to $400,000
Factor rates starting at 1.15
$25,000 - $2 million
8%-30% for equipment financing
$5,000 to $200,000
Max 35.99% APR
Up to $250,000
As low as 4.8%
Up to $150,000
4.66% to 8.933% and higher
$20,000 - $50,000
6% and up
How Much Does It Cost to Finance a Food Truck?
Financing a food truck is oftentimes more expensive than people anticipate. According to On the Line, the truck alone can cost $50,000 to $175,000, and there are many other fees, as well. Equipment, plumbing, and design can cost anywhere from $50,000 to $200,000, and permits and licenses will cost an additional thousand, at a minimum.
Plan on spending between $50,000 and $250,000 or more just to get your food truck up and running, and then account for long-term expenses such as truck maintenance, inventory, and payroll expenses.
How Can You Use a Food Truck Loan?
Food truck loans can be used for a variety of expenses, such as:
Purchasing a food truck or trailer - Buyers can decide whether to use the funds for a new or used truck or trailer.
Maintaining a food truck or trailer - Owners can use money to keep up with the repairs and maintenance required to keep their truck or trailer in running condition.
Obtaining food storage systems - Setting up the truck or trailer with equipment and systems is one of the ways borrowers can use funds.
Marketing and advertising materials - Another way to use the money is to help promote the business through marketing and advertising materials.
Staffing and payroll needs - Especially during times of growth, business owners may need funds to cover staffing and payroll needs in order to keep up with expansion.
Food inventory - Stocking inventory is something every food truck or trailer business needs and a business loan can help cover these expenses.
Business expansion - When a business owner experiences success and wants to open another food truck, business loans can help get the expansion started.
Unexpected bills - Whatever unexpected expenses come up, food truck financing can help cover the gaps and keep your business up and running.
How Does Food Truck Financing Work?
After filling out an online application form, a customer service representative may contact you to get further information and discuss loan options. From there, companies will require financial records either by linking your bank accounts to your application or submitting them after applying. Most companies will also do a hard pull on your credit after initial approval.
Once approved, some lenders will offer same-day funding, while others may take up to 72 hours to fund your loan. These funds will transfer to your bank account, or if you have a line of credit, you will have a card you can use to access the funds as you need them.
How to Qualify for Food Truck Financing
The ability to qualify for food truck financing depends on the lender’s requirements. Each lender will look at your credit score, your time in business, and your annual revenue. Some lenders have stricter qualification criteria than others, but will oftentimes offer lower rates. We recommend applying to a few different lenders, since applying usually does not affect your credit score. You can then compare your loan options before moving forward.
How to Apply for Food Truck Financing
Most online lenders usually have a a straightforward application process. The first step is to go through a prequalification process to see if you might be approved for the financial product you’re requesting. The prequalification process does not affect your credit score. Information requested during this process includes
Basic personal and business information
The amount you want to borrow
The purpose of the loan
The repayment term the borrower would prefer
Once you’ve been prequalified, you’ll need to submit additional paperwork. Documents include, but are not limited to:
Personal and business tax returns
Three months (or more) of bank statements
Business lease, if applicable
We recommend having these documents on hand to ensure financing is as quick and seamless as possible. Once everything is submitted, you’ll receive an official decision and funding shortly after.
What Credit Score Do You Need to Buy a Food Truck?
Most companies require a credit score of at least 550-600 to qualify for food truck or food trailer financing. However, some equipment financing loans don’t require a credit score, making food truck financing with bad credit a possibility. For lenders that do require a credit score, you’ll receive a better rate on your loan if your credit is in good condition.
Although starting a food truck can be an expensive endeavor, financing a food truck can make it doable. Traditional banks, credit unions, and other small business loan providers may be hesitant to provide lending, but there are several online lenders that will extend credit. If you are considering taking out a business loan for a food truck purchase, be sure to weigh all of your options. Your credit score, annual revenue, time in business, as well as other factors will determine how much of a loan you can take out, as well as the interest rate you’ll receive.
Frequently Asked Questions(FAQ)
What is the best business structure for a food truck?
You can choose between a sole proprietorship, a partnership,
and a limited liability corporation (LLC). All have advantages and
disadvantages, but the most popular option is the limited liability
corporation. This is due to low start-up costs and the business owner’s
personal assets being kept separate from the liabilities of the food truck.
What are the best cities to own a food truck?
According to Bloomberg, cities that are the most food
truck-friendly include Portland, Denver, Orlando, Philadelphia, and
Indianapolis. Cities were ranked on obtaining permits and licenses, complying
with restrictions, and operating a food truck. Highly regulated cities - such
as San Francisco and Boston - are some of the hardest places to own and operate
a food truck.
What is the most profitable food truck business?
Street Food Central found that burgers are the most
profitable food truck business. Not only are they tasty, but they’re fairly
cheap to make. Other profitable food trucks include Indian street food, pizza,
grilled cheese, and Greek food. We found that with food trucks, simple is best.
Rather than serving a complex menu, stick to just a few items - and do them