Starting a food truck, just like any other business, requires a start-up investment. You need money to purchase your truck, get permits, and buy kitchen and food supplies.

There are several ways to raise the money to get your food truck venture off the ground. You can find investors, you can use cash on hand, or you can save up the money over time. For many owners though, the most convenient way to get a food truck going will be via a business loan.

Keep reading to find out how to get food truck financing.

1. Start With Market Research and a Business Plan

Before starting any business, you need to do your homework. You need to understand the local market in terms of competition, demand, pricing, costs, regulations, and more. You need to determine if your business idea is viable and what your opportunity will be for growth and success.

Then, you can build a business plan. This is an essential document that lenders or investors will look at to judge the credibility of your future business. 

Fortunately, there’s much less risk involved with a food truck than a traditional restaurant. Your overhead costs will be far cheaper, you’ll have fewer employees, no dining room, etc. This will make it easier to get financed.

2. Small Business Loans

Can you finance a food truck through a traditional bank or SBA loan? The answer is yes, assuming your business plan is well-written and you have an acceptable credit score.

First, you’ll need to come up with a dollar amount of how much startup money you will need. Then, do some research on the various types of loans available and figure out which one will best meet your needs. 

3. Private Investors

If you get turned down for a small business loan, you can seek private investors for food truck financing. There are multiple options here. 

First, you can try to find an angel investor. They will provide the startup funds you need in exchange for equity in the business. They may also allow you to pay back your debt over time instead of taking equity.

There are also peer to peer investors. These are organizations that invest in small businesses they see potential in. They basically provide loans like a bank but aren’t a bank. 

4. Crowdfunding Campaigns

Another option for food truck and food truck equipment financing is crowdfunding campaigns. This provide a great way to make money if you’re turned down by the bank and traditional investors. Crowdfunding relies on larger groups of investors all contributing small amounts to pool together the necessary funds.

Contributors can be rewarded with stock in the company, free products, etc.

5. Friends and Family

Can you finance a food truck without applying to banks or investors?

Yes, you still have options. Consider getting funds from people in your personal life. These include friends, family members, neighbors, and co-workers. 

You should still provide a business plan to show them how serious you are and that their investment won’t be wasted. This may mean you need to finance a smaller or more modest food truck instead of the huge truck that costs more, or cut startup costs elsewhere.

So, Can You Finance a Food Truck?

Are you ready to start a food truck restaurant? If so, we can help. Now that you know the answer to financing your food truck, let’s talk about getting you on your way. Contact us today for a custom quote!

Want more food truck advice? Check out more blog posts here!

Thinking about starting a food truck? Request a free custom quote and one of our food truck specialists will help you design the truck of your dreams.

Stay up to date on everything Custom Concessions has to offer! Like us on Facebook and follow us on Twitter.

The post Can You Finance A Food Truck? How To Get Food Truck Financing appeared first on Custom Concessions.

Investing in a food truck isn’t going to be cheap but has huge potential, so you need to be informed from the start and have a plan for being profitable. Below we’ll review some of the top operating costs you can expect to encounter when you start your food truck business. 

Fuel Costs

When using a food truck you have to consider fuel costs. No matter if you’re using your food truck locally or going across the country, fuel needs to be a line item in your budget. If you’re going across the country, you’ll need to factor in those costs before you travel.

You’ll also have to consider the size of your truck—the bigger the truck, the more you’ll be spending on fuel. How heavy the equipment you use will be a factor as well, as heavier equipment will add more weight to your truck. More weight equals higher fuel costs.

Calculate how many miles you’ll be going each day compared to your truck’s gas mileage to see how much you’ll be paying each month.

Keep in mind that gas prices vary from state to state. If you plan to travel across state lines make sure to calculate the difference.

Ingredient Costs

Know what ingredients you’ll be using frequently and how much they’ll cost you. Some foods are more expensive than others, especially meats and spices.

Try not to have a large menu, as more ingredients means higher prices. Moreover, you may not have space for as many different kinds of ingredients, depending on the size of your truck and how much storage is available.

Another way to reduce your ingredient cost is to rotate your menu with the seasons using seasonal foods. Buying food in season will save you a lot of money.

Buying in bulk can also reduce how much you should expect to pay. Keep in mind that you need space to store large amounts of food. You may want to store some of these bulk foods somewhere off site so they don’t crowd up the limited space in your kitchen and contribute even more to the gas-guzzling nature of your food truck.

When looking at your food costs, a good rule of thumb is to keep your food costs between 28%-35%.

Demand

When you set up shop, you need to know your demographic. You need to tailor your menu to the people you’re serving. What you sell in one location may not sell well in another location.

You also need to predict how many people will come to your truck. You don’t want to have more food than you need. Too much food can lead to waste, which basically means money down the drain.

Review how well other food trucks in the area have done. Look at sales forecasts and previous sales made by other food trucks.

Moreover, review when food trucks are more popular in that specific area. You want as much foot traffic as you can get.

On top of that, when people go to food trucks, they’re not expecting a large menu. Be clear about what you’re selling. If potential customers don’t understand what you’re selling they won’t buy from you.

Permits, Licenses, Certificates, and Insurance

There are many fees that come with food trucks. Make sure you can afford them before you start a food truck business.

Permits, Licenses, and Certificates

You need permits, licenses, and certificates to be able to legally serve food. For example, you’ll need health permits, hazard prevention, vehicle, and zoning permits. Moreover, food safety certificates may be required (e.g. ServSafe certified).

You may need to get many permits if you go out of your state, or even to a different location in your state. States and local jurisdictions (e.g. counties, towns) have different regulations and prices.

Research each location before you go to make sure you have the proper documentation. Getting this documentation can take time so prepare in advance.

Be aware of how often these need to be renewed as well. Each time you need to renew you’ll have to shell out more money.

Once you have all your documentation, you’re still regulated on where you can set up shop. There will be specific locations and hours you’ll be able to sell food.

Insurance

Not only do you need permits, certificates, and licenses, but insurance as well. Insurance is essential for protecting your business, but it comes at a cost.

Some types of insurance you’ll definitely want include auto, liability, and workers’ compensation. You’ll also want a business owner’s policy. This should bundle in your general liability and property insurance.

Getting bundle deals for your insurance will reduce the amount you’ll be charged for them.

Renting Space

Unlike a restaurant, you’re not guaranteed a fixed space. You need find somewhere to park your vehicle when you’re not serving food.

Moreover, you won’t have as much space as a restaurant. If you can’t get everything done in your food truck, and/or can’t hold everything in it, you’ll need extra space, like a commercial or commissary kitchen.

Parking

Before you go on the road, research your route ahead of time. Reserve parking, if possible. By reserving space ahead of time you may also save on costs.

Commercial/Commissary Kitchens

If you need to store food, you may want/need to use a commercial or commissary kitchen. You can pick up food as you need it.

Keep in mind how far away the location is from where you’re selling your food. You don’t want to make many trips if you have to travel further away from the kitchen.

Having access to one of these kitchens will make it easier for you to prep all your food beforehand. You won’t have to try and prep your food in the small space of your food truck.

On top of that, your food truck may not have all the equipment you need to prepare your food beforehand.

Top Food Truck Costs

These are some of the food truck costs you need to be aware of. Do your research to learn about other costs that could affect you. Look for ways to reduce your costs—you don’t want to pay more than you have to.

Want more food truck advice? Check out more blog posts here!

Thinking about starting a food truck? Request a free custom quote and one of our food truck specialists will help you design the truck of your dreams.

Stay up to date on everything Custom Concessions has to offer! Like us on Facebook and follow us on Twitter.

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