Food truck financing: Get cooking with our guide to loans, costs, and how to qualify

Compare food truck financing options  

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Equipment financing

If you’re looking for money for equipment purchases like a deep fryer or an oven, consider equipment financing. These loans use the food truck equipment you’re buying as collateral against the loan, which may help you get a competitive interest rate. Equipment financing may come with certain tax benefits as well. You can also consider commercial vehicle loans if you're looking to finance the food truck itself.

The downside of a secured type of loan like equipment financing or a vehicle loan is that the lender can repossess your collateral if you default. 

SBA loans

There are several types of small business loans that are guaranteed by the Small Business Administration (SBA). These include 7(a) loans and SBA microloans, both of which can be helpful for food truck businesses. 

SBA 7(a) loans can go up to $5 million, with repayment terms up to 10 years for vehicles and equipment (up to 25 years is reserved for real estate purchases). SBA microloans, on the other hand, max out at $50,000 with repayment terms up to seven years (the average microloan amount is $13,000). 

You generally need good credit and a personal guarantee to get an SBA loan. The application process for SBA loans can be relatively lengthy and may span several weeks to a few months. 

Lines of credit

Another option for food truck funding is a business line of credit. Unlike with a loan, which gives you a lump sum all at once, a line of credit lets you borrow as needed. You can borrow up to your credit limit, pay the amount back, and borrow again. This flexibility can be especially helpful for food trucks where seasonal changes in business or unexpected expenses like a costly repair must be handled quickly. 

Line of credit terms will vary, but you may be able to borrow anywhere from $1,000 to $1 million or more. While interest rates on business term loans are usually fixed, the rates on lines of credit are often variable and go up or down with market conditions. 

Business credit cards

While not always the most affordable form of funding, business credit cards can be useful in some scenarios, especially if you have an urgent expense and need funds immediately. They may be easier to qualify for than a business loan for new businesses that don't have steady revenue yet. 

If you're using a business credit card, try to pay off your balance in full before interest charges kick in. You might also seek out business credit cards that offer an introductory 0% APR for a period of time. Keep an eye out for rewards programs that let you earn points you can redeem toward cash back or travel expenses. If used responsibly, credit cards can be financially rewarding. 

Crowdfunding

If you want to avoid taking on debt, another option to consider is crowdfunding. With crowdfunding websites like Kickstarter and GoFundMe, you can try to raise money from both professional investors and potential customers who want to support your food truck endeavor.

There are different types of crowdfunding, such as rewards-based crowdfunding and investment crowdfunding. Some require you to pay back the funding, while others only require you to give donors a reward as a thank you. You may have to pay a fee to the crowdfunding platform, as well as a fee for credit card or PayPal transactions.

Merchant cash advances

Merchant cash advances (MCAs) offer an advance against future sales, based on your past sales history. A portion of your future credit or debit card transactions will then be deducted to repay the advance. You can often get a merchant cash advance quickly, and it typically doesn't require good credit. The downside is that costs can be high. 

How much does it cost to start a food truck? 

The average purchase price in 2026 for a new food truck is $109,500 and $46,800 to buy a used truck, according to data from industry publication Food Truck Profit. You'll also have to cover other expenses, such as: 

• Renovations, repairs and/or retrofitting
• Wrapping
• Equipment
• Business formation costs
• License and permits
• Fuel 
• POS system
• Commercial kitchen costs (if needed)
• Food & beverages
• Paper products
• Initial labor costs
• Website
• Advertising
• Social media marketing

According to national license data from Food Truck Profit, on average, a food truck needs to obtain at least six different permits, licenses, or registrations to operate legally and it can take up to 37 business days on average to complete all regulatory steps to start a food truck in a typical U.S. city.

As you estimate your startup food truck costs, this free spreadsheet from FoodTruckEmpire.com can help. 

How to qualify for food truck financing 

Each lender has its own requirements for food truck financing, but most will consider your credit, revenue, time in business, and overall financial health. Here are some common requirements you may encounter to get a business loan: 

• Be in business for at least six months: Many lenders require a minimum amount of time in business, such as six months or two years. However, there are some financing options available for starting a food truck business. 
• Have consistent business revenue: A lender may want to see a certain amount of monthly or annual revenue. But if you're just getting started, look for a lender with more flexible requirements. 
• Have good personal or business credit: Lenders review your credit to assess your risk as a borrower. Having strong credit can help you get approved and access better interest rates. 
• Provide collateral or a personal guarantee: The lender may require you to back your loan with collateral, such as equipment, or a personal guarantee, which means you'll pay back the loan from your personal funds if your business revenue falls short. 
• Make a down payment: Some lenders will ask you to put down a percentage of the loan upfront as a down payment. Equipment financing, for example, may require a down payment of 10% to 20%. 
• Provide financial documents: You'll also need to upload financial and business documents, such as tax returns and bank statements.
• Have a business plan: A lender may want to see a business plan that outlines your plans for the food truck and revenue projections. 
• Be prepared for a UCC filing: Some lenders may file a UCC lien as security for the loan, which can impact your ability to get other financing and may appear on your business credit report.

Credit score requirements 

Credit score requirements vary by lender and loan type, but many lenders prefer a credit score of 640 or higher. A good credit score starts at 670 on the FICO scoring range, while a very good score starts at 740 and an exceptional score is 800 and up. 

Here's what you might expect at each credit score tier:

If you don't have an immediate need for a loan, you might consider strengthening your credit score before you apply. Some steps that can help include making on-time payments on your loans and reducing your credit utilization. You can also review your credit reports for any errors that may be unfairly dragging down your score. 

Financing a food truck for events and festivals

Events and festivals can be a great way for food truck businesses to reach new customers and make more sales. Participating in large events, though, may come with some upfront costs, such as event fees and extra inventory and staff. 

Short-term financing may be available to help cover these costs without detracting too much from your regular cash flow. A business line of credit, short-term business loan, or business credit card, for example, could provide funds for you to stock up on food and supplies or bring on additional workers. 

If you're looking for financing to get ready for an event, think about how much you expect to make from the festival, how quickly you can pay back the funds, and the total cost of borrowing. 

Rates and terms 

Rates and terms for food truck financing vary widely depending on the type of financing and your financial qualifications. Here are a few examples: 

• SBA loans: SBA 7(a) loans can go up to $5 million, with repayment terms up to 10 years for vehicles and equipment (up to 25 years is reserved for real estate purchases), while SBA microloans have a maximum amount of $50,000 and repayment term of seven years. Interest rates are based on a base rate plus a certain percentage on top. 
• Small business loans: Rates vary by lender, but may start around 6% or higher. Amounts can run anywhere from a few thousand dollars to $1 million or more, and repayment terms may span 10 years or longer. 
• Business credit cards: Your credit limit depends on your creditworthiness, and interest rates may be 15% to 20% or higher. As mentioned, some cards offer a promotional 0% APR period for new cardholders. You have to pay a minimum amount each month, but paying your balance in full monthly can help you avoid interest charges.  
• Crowdfunding: There's typically no cap on how much you can raise, though you may have to pay fees to the crowdfunding platform (up to around 5%), as well as credit card or PayPal processing fees (usually around 3%). If you don’t hit your fundraising goal, you may not get any of the funds.

Since rates and terms can vary significantly, it's worth shopping around and comparing all your options to find your best fit. 

Tips for getting approved 

Here are a few steps that can boost your chances of getting approved for food truck financing: 

• Check your credit: Review your credit so you know where you stand, and dispute any errors you may find on your credit report. 
• Estimate your borrowing needs: Consider how much you need and can comfortably repay so you don't take on unnecessary debt. 
• Consider different financing options: Compare options like equipment financing, vehicle loans, small business loans, and lines of credit to find your best match. 
• Prepare your documentation: Gather documents that show your revenue, expenses, cash flow, and other financial information a lender will need. 
• Shop around with multiple lenders: Compare rates, fees, loan amounts, and approval requirements to find your most affordable financing option. 
• Offer a down payment, personal guarantee, or collateral: Adding this extra security to your loan may help you get approved and access a better rate. 

The bottom line 

With many options for food truck financing, the biggest decision for entrepreneurs is choosing the loan, line of credit, credit card, or crowdfunding platform that suits your needs best. As you do your research, make sure to factor in all the expenses you’ll need to cover. 

These may include working capital, permits, licenses, equipment, inventory, and marketing. Some borrowers opt to pad their loans with a little extra in case of emergency. That way, you can cover unforeseen expenses like your griddle breaking during your busiest season.

Frequently asked questions