Financing a Mobile Food Truck Business

Smaller businesses are often in need of financing more often than others and mobile food vendors are no different. Because you’re not working with a larger company, you’ll need to find funding to get started, and you’ll need to continue to have funding as you continue to grow and to manage your food truck business. While you might have some funding to begin, you will need to look at the future to see how much more funding you will require as your business grows.
Food Truck Business Plan

Use a Food Truck Business Plan Template (such as the one available on to Plan Your Food Truck Success

You have a number of options when it comes to funding your food truck business

The mobile food business does actually require more funding than one might initially imagine.  Once you’ve worked out how much it might cost to get started, then you’ll be looking for the funding.  Give some thought to the places you might find sufficient funding as you’re going through your business planning process.  Finance will be a major section of your mobile food vendor business plan.  Some sources you may consider for obtaining finance are :

  • Personal savings
  • Friends and family
  • Banks
  • Credit unions
  • Private investors

And an important note to make at this point – do be sure to take out mobile food vendor insurance before you start trading.  You hope you will never have to use it, but you’ll be glad you have it if and when you do need to use it!  Mobile food trucks run all the risks of any on-road vehicle…plus some!  See our page on Safety for more information.

Your personal savings will often be the first source of funding your startup mobile food business. This might come from money you’ve saved up, or it can come from your current salary if you’re going to ‘straddle’ out of your current job and into your own business.. It’s a good practice to begin using money that you’ve saved up, as you won’t impact your current income, provided you have a job right now.  Since your personal savings is a limited source of funding (as you’ll be spending it immediately), you will need to seek out additional sources of funding in order to make your food truck business run until you make profits.  The interest you will pay on any borrowed funds will add to the demand on your food truck business and will be particularly noticeable in the early days.

Financing will be Critical to your Food Truck Business

Clever tip jar at the “Pork Slider” food truck

Friends and family are another worthwhile option to explore when seeking out funding. You can ask friends for short term loans that will be repaid as soon as you begin to make a profit.  Do remember that in any startup business, it can take some time for a profit to be made – it will be the same in any mobile food business too and it’s important that any financiers be aware of your financial projections.

As the saying goes that you shouldn’t mix business with friendship, here are some ways to make sure you’re creating the best possible arrangement with friends and with family:

  • Create a contract – Just as with any financial arrangement, creating a contract is the ideal situation. You want to carefully outline your payment from the person you know and create a repayment schedule based on your estimated profits. While the contract might be changed in the future, depending on the income you make, you will want to start off with a clear idea of what your friend or family member can expect from their investment.
  • Get a lawyer involved – Hiring a lawyer to outline a contract will be a helpful way to ensure that everyone feels comfortable with the arrangement. While this might seem too ‘professional’ for some, this is essential to make sure that you are paying back your investors. Write up a contract, have it signed by both parties, using a lawyer as a person who will help you draw up all of the legalese that will allow for the payment process to be clear and binding.
  • Don’t take this arrangement for granted – While it might be tempting to look at the money from friends and family as “free”, this is not the mindset to have. While you may be able to have some extra time on repayment from an understanding parent, for example, you don’t want to create a situation in which you continue to take money, but you don’t repay it. Banks are another source of funding that you will want to seek out. With their support, you can begin to create a strong financial foundation. You can seek out small business loans or use the equity in your home to find the funding you need for your business.
  • Research lending institutions – Lending institutions are plentiful, and to get the best terms for a loan, you will want to research the different lenders, not only in your area, but also around the country. When you do this, you will see what terms are being offered, and even be able to bargain among these options to ensure you get the best possible deal.  Some lending institutions will probably be more amenable to lending to a food truck business than others.  It will pay to ‘shop around’ for a lender you can work with.
  • Contact your current bank – If you already have a long-term relationship with your bank, it can help to talk to them first about what they can offer a small business. They already are aware of your financial position and your reliability, so they can begin to work with you from that added information. You might also be able to take advantage of your local area’s resources, which the bank might be able to direct you to.
  • Look into small business loans – The Small Business Administration in your area will help you locate local deals that can help you create a better business loan situation. When you contact the SBA, you will find that you have different options based on your credit rating. Credit unions are local banking institutions that work with local people to create their banking terms. While these credit unions might not always offer as many options for loans as your regular bank, they are often more willing to work with local businesses, as they want to do things that will support the community.
  • Private investors can also be helpful when you’re seeking funding. Talk with those in your area who have supported other businesses – especially if you can find someone who has funded other mobile food vendors. You can find these investors by talking to other food service providers, or you can simply begin to cold call possible investors in your area to see how they might be able to help you with your dreams.

No matter what you might need for your food truck business, it’s always a better idea to have more funding than to have less. You have a number of expenses to keep in mind.

You Need a Mobile Food Business Plan to Ensure Costs are Covered

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