One of the major steps in getting your food truck on the road is securing financing, especially if you don’t have the cash to buy the truck outright.
Commercial auto loans are the go-to option for many entrepreneurs, as they offer tailored financing solutions specifically designed for business vehicles like food trucks.
In this article, you will learn how commercial auto loans for food trucks work, what makes them different from traditional vehicle loans, and the best companies offering these loans.
We will also explore their requirements, rates, and application processes to help you make an informed decision.
What Is a Commercial Auto Loan for Food Truck?
A commercial auto loan is a financing product designed for vehicles used primarily for business purposes.
Unlike personal auto loans, commercial loans cater to trucks, vans, buses, and other vehicles essential to business operations, including food trucks.
Since food trucks are both a commercial vehicle and a mobile kitchen, financing them requires specialized loan terms and conditions.
The lender provides you with funds to purchase or refinance your food truck, which you then repay with interest over a set period, usually ranging from 2 to 7 years.
The truck itself serves as collateral for the loan. If you fail to repay, the lender can repossess the vehicle.
How Does a Commercial Auto Loan Work for Food Trucks?
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Loan Amount
The loan amount depends on the value of the truck and your creditworthiness.
Typically, lenders offer financing covering 80-100% of the purchase price, including modifications needed for kitchen equipment.
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Loan Term
Terms vary, commonly between 24 and 84 months. Shorter terms mean higher monthly payments but less total interest. Longer terms reduce monthly payments but increase total interest paid.
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Interest Rates
Rates depend on credit scores, business financials, and lender policies. Commercial auto loans usually have higher interest rates than personal auto loans due to increased business risk.
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Down Payment
Many lenders require down payments, often between 10% to 20% of the truck’s purchase price. A larger down payment can lower interest rates and improve loan approval chances.
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Collateral
The food truck serves as collateral. Failure to repay the loan gives the lender the right to repossess the truck.
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Repayment
Repayment schedules are typically monthly and include principal and interest. Some lenders may offer flexible payment options based on your cash flow.
Why Choose a Commercial Auto Loan for Your Food Truck?
- Specialized Financing: Designed to cover the specific needs of business vehicles, including customizations.
- Tax Benefits: Interest and depreciation on commercial vehicles may be tax-deductible.
- Build Business Credit: Proper loan management helps build your business credit score.
- Preserve Cash Flow: Financing allows you to keep cash available for other business needs.
Top Companies Offering Commercial Auto Loans for Food Trucks
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Bank of America
Bank of America provides flexible financing options with competitive interest rates tailored for small business owners.
Their commercial auto loans cover a range of vehicles, including food trucks, offering terms that can adapt to your business needs.
This flexibility helps manage cash flow while securing the necessary funds for your truck purchase.
Requirements:
- Strong business credit score (usually 680 or higher)
- Proof of steady revenue
- Business documentation, including EIN, tax returns, and licenses
Rates:
- Fixed APR ranging from 4.5% to 10%, depending on creditworthiness
- Loan terms up to 72 months
Application Process:
- Apply online or at a branch
- Submit business financial statements and truck purchase details
- Approval is typically within a few business days.
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Wells Fargo
Wells Fargo delivers comprehensive commercial vehicle financing solutions designed specifically for food truck entrepreneurs.
They offer personalized support throughout the loan process, helping you choose terms and repayment options that fit your business goals.
With competitive rates and flexible loan lengths, Wells Fargo aims to make financing your food truck straightforward and affordable.
Their dedicated small business team assists with application guidance, ensuring you have the best chance to secure funding and grow your mobile food business.
Requirements:
- Minimum 2 years in business
- Business financials, tax returns, and proof of income
- Good to excellent credit (generally above 700)
Rates:
- Starting at 5.5% APR for qualified borrowers
- Loan terms between 24 and 84 months
Application Process:
- Online pre-qualification available
- Submit detailed business financial documentation
- Approval can take up to 5 business days
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LightStream (a division of SunTrust Bank)
LightStream is an excellent financing option for food truck owners who might lack an extensive business credit history but maintain strong personal credit.
This lender offers competitive rates and flexible terms tailored to entrepreneurs starting or growing their mobile food business. With a straightforward online application process and quick funding,
LightStream helps food truck owners secure the capital needed for equipment, inventory, or expansion without the hurdles of traditional business loans.
It’s ideal for those leveraging personal credit strength to fuel their food truck dreams.
Requirements:
- Excellent personal credit score (700+)
- Proof of income and employment
- No business revenue requirements, suitable for new startups
Rates:
- Rates as low as 3.49% APR
- Terms up to 84 months
Application Process:
- Fully online application with quick decisions
- No collateral required (unsecured loans available)
- Funds deposited as soon as the next business day
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Commercial Loan Group
This lender focuses on providing commercial loans specifically designed for vehicles and equipment, making it a perfect fit for the food truck industry.
They understand the unique needs of mobile food businesses and offer competitive terms, including flexible repayment options and attractive interest rates.
By specializing in this niche, they help food truck owners finance everything from truck purchases to kitchen equipment upgrades, ensuring entrepreneurs can efficiently grow their operations with tailored financial solutions that support their business goals.
Requirements:
- A credit score above 650 is preferred
- At least 6 months in business
- Financial statements and business licenses
Rates:
- Varies widely (6% to 15% APR) based on risk profile
- Flexible terms from 12 to 72 months
Application Process:
- Online application with quick pre-qualification
- Requires detailed documentation
- Fast approval and funding options
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Equipment Finance Companies (e.g., Balboa Capital)
These companies specialize in financing equipment-heavy purchases, such as food trucks, making them an excellent choice for entrepreneurs seeking customized vehicles.
They understand the high costs associated with outfitting a mobile kitchen and offer tailored loan options to cover both the truck and specialized equipment.
With flexible terms and competitive rates, these lenders help food truck owners invest in fully equipped, customized vehicles that meet their unique business needs and operational goals.
Requirements:
- Business must be at least 6 months old
- Good credit history and financial documentation
- Proof of truck purchase or invoice
Rates:
- Starting from 6% APR, it can be higher depending on credit
- Terms up to 60 months
Application Process:
- Online or phone application
- Fast approvals, often within 24 to 48 hours
- Flexible repayment schedules
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Nav
Nav offers a valuable service for food truck owners by allowing them to compare multiple commercial loan offers all in one convenient platform.
This helps entrepreneurs quickly evaluate different lenders, interest rates, and loan terms without the hassle of applying individually.
By providing personalized loan matches based on business profiles and credit history, Nav simplifies the financing process, empowering food truck owners to make informed decisions and secure the best funding options to grow their mobile food business.
Requirements:
- Business credit score and personal credit evaluated
- Minimum 1 year in business preferred
- Financial documentation and EIN
Rates:
- Rates vary from 6% to 20% APR
- Terms from 12 to 60 months
Application Process:
- Online platform for loan comparison
- Quick prequalification with no hard credit check
- Connects borrowers to multiple lenders
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Kabbage (now part of American Express)
Kabbage is well-suited for food truck businesses that require flexible funding options to manage cash flow, cover unexpected expenses, or invest in growth.
Offering a straightforward online application and quick access to funds, Kabbage provides revolving lines of credit that can be drawn upon as needed.
However, business owners should be aware that interest rates may be higher than those of traditional loans, making it important to weigh the benefits of flexibility against the cost of borrowing.
Requirements:
- Minimum 1 year in business
- Revenue proof and bank statements
- No minimum credit score, but credit history is considered
Rates:
- Interest rates vary, typically 8% to 24% APR
- Revolving line of credit up to $250,000
Application Process:
- Fast online application
- Access funds quickly, ideal for flexible capital needs
- Suitable for short-term working capital alongside truck purchase
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TD Bank
TD Bank is known for its strong customer service and personalized loan options tailored to small businesses, including food trucks.
They offer flexible financing solutions designed to meet the unique needs of mobile food entrepreneurs, such as equipment purchases and working capital.
With a focus on building lasting relationships, TD Bank supports food truck owners through dedicated business advisors who guide them through the loan process, ensuring they receive the best financial products to help grow their business.
Requirements:
- Established business with 2+ years of revenue history
- Good credit history (typically above 680)
- Proof of business insurance and licenses
Rates:
- Competitive fixed rates starting around 5% APR
- Loan terms up to 72 months
Application Process:
- In-branch or online applications are available
- Requires full business documentation
- Decision time averages 3 to 7 business days
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Celtic Bank
Celtic Bank specializes in SBA-backed loans and commercial auto loans, providing food truck owners with favorable financing options.
Their SBA loans offer low down payments, longer repayment terms, and competitive interest rates, making them ideal for entrepreneurs investing in mobile kitchens.
Additionally, their commercial auto loans are tailored to cover vehicle purchases and upgrades.
Celtic Bank’s expertise in these loan types helps food truck businesses access affordable capital to grow and sustain their operations effectively.
Requirements:
- At least 1 year in business
- Credit scores are usually 650+
- Financial statements and truck purchase documentation
Rates:
- Starting around 6% APR
- Terms range from 12 to 84 months
Application Process:
- Online application with fast review
- Typically requires detailed financial info
- Quick funding once approved
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Lendio
Lendio is a comprehensive marketplace for business loans, offering food truck owners access to a wide variety of financing options all in one convenient platform.
By connecting entrepreneurs with multiple lenders, Lendio simplifies the search for the best loan terms, rates, and repayment plans.
This streamlined approach saves time and effort, empowering food truck owners to compare offers, make informed decisions, and secure the funding needed to start, expand, or maintain their mobile food businesses.
Requirements:
- Business operational for at least 6 months
- A credit score of 600+ is preferred
- Income and tax documents
Rates:
- A wide range from 6% to 30% APR based on the lender
- Terms from 12 to 72 months
Application Process:
- An online platform connecting borrowers to multiple lenders
- Fast pre-qualification with minimal impact on credit score
- Flexible loan offers tailored to food truck needs