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How to Get a Business Loan for a Food Truck

When it comes to starting or even expanding a food truck business, you are likely going to need a business loan to be able to achieve your dream.

A loan is a monetary product that gives the applicant the opportunity to access a certain amount of money as agreed by both parties (the applicant and the financial institution issuing the loan). The agreement entered into before a loan can be issued usually include; the payment plan, interest rate, and the implications for defaulting in payment.

Whatever the challenges you are facing when it comes to raising funds for your business, you will overcome them by approaching loan issuing institutions in and around your locality. Having said that, here are the steps you should follow if you want to get a business loan to start or expand your food truck business in the United States of America.

Steps to Get a Business Loan for a Food Truck

Step One: Know How Much You Need

The first step to take if you want to get a business loan for your food truck business is to know how much you really need. If you walk up to a bank and tell them that you need a business loan, the first thing they will ask is to know the exact amount you need and what you want to use the money for.

Usually, you are expected to have part of the money you need and then source the rest as a business loan. You don’t expect a loan issuing institution to give you all the funds you need without any financial commitment from your end.

Step Two: Write a Business Plan

The essence of a good business plan cannot be over-emphasized. As a matter of fact, no business loan issuing institution will issue a business loan to anyone who doesn’t have a business plan. Your business plan is part of what will be assessed before you can access a business loan from a financial institution.

The business plan will give a clear picture of why you need the loan, the viability of the food truck business, and of course, your capacity to repay the loan. This is why you should hire an expert to help you write your business plan. Experts usually know the areas financial institutions will be looking out for when scrutinizing a business plan.

Step Three: Check Your Credit Score

Another thing you would need to do if you want to apply for a business loan for your food truck business is to check your credit score. If you have a bad credit score, you can hardly get any loan issuing institution that will grant you a loan.

A credit score predicts the possibility of a person being able to pay back the loan they received. It shows how good or how bad you are with handling funds. Credit scores are calculated based on a scoring model that makes use of information from your past credit activities. The result you get from the report will determine if you are qualified for a business loan.

Step Four: Gather Your Collateral

The next step you should follow if you are looking to secure a business loan from a financial institution is to gather your collateral. Different financial institutions have different requirements as regards collateral, so you should be prepared ahead of time before approaching a financial institution for a business loan.

Your collateral is anything that you are required to present before you can be given a loan. What you should prepare as collateral will include your equipment, your inventory, your invoices, and your real estate (properties) if you have any. You should get all the documents ready because you will need them.

Step Five: Make a List of The Financial Institutions to Approach

The next step to take after you have done all that is to make a list of the financial institutions that are likely going to issue you a business loan. Some financial institutions are skeptical of the ability of start-up food truck businesses to repay their loans hence they are usually averse to giving the loan.

This is why you should make sure you research all the financial institutions around you to know what their requirements are. Once you are done with your research, then you should come up with a list of possible financial institutions you will approach for a loan. You may want to list them based on the possibility of easily securing a business loan from them.

Step Six: Visit Financial Institutions and Talk About Your Business Loan Request

The next step to take after you have come up with a list of potential financial institutions is to visit them to talk about your request for a business loan. You are not expected to go with your applications at this stage, because each financial institution has its expectations when it comes to loan applications.

All you are expected to achieve from this stage is to know if it is possible to secure a business loan from them and also to know what you should include in your application.

Step Seven: Send in Your Application

The last stage in your quest of getting a business loan is to write and send in your application. There are no technicalities when it comes to the format of writing a business application, the major thing is to include all the needed documents that will guarantee that your business loan application will be considered.

Please note that there is no limitation on the number of loan applications you can send in per time. As a matter of fact, it is to your advantage to send as many applications as possible so as to increase the possibility of getting the business loan on time.

If you are able to secure a business loan from one financial institution, you can turn down others even if they approve your loan application.

Sources of Food Truck Loans and Their Requirements

Here are some of the sources you can access business loans for a food truck business and the expected requirements;

  1. Family Members and Friends

One of the easiest sources to consider when sourcing a business loan for your food truck business is your family members and friends. If you are planning to start a small-scale food truck business, this might just be your best pick. This is because there is a limit on the amount you can get as a loan from your family members and friends.

  • Good standing with your family members and friends
  • Clear plan to start and run the business
  • A clear plan on how to pay the loan back
  1. Banks (Financial Institutions)

One of the major sources people go to when they need a loan is their bank. So, if you need a business loan for your food truck business, you should consider visiting your bank.

Although it might be difficult for a startup entrepreneur to access a business loan from a bank, the truth remains that it is possible if you meet their requirements. The bank has the capacity to issue you a business loan no matter how much you need.


Each bank has its own loan requirements but the basic requirements are:

  • You must own an account with the bank (preferably a business account)
  • Score a good credit score (from 640 to 700)
  • Bank statements
  • Meet their collateral requirements
  • Business licenses and permits
  • Personal and business tax returns
  • Employee Identification Number (EIN)
  • Disclosure of other debt
  • Copy of your commercial lease
  • Submit a business plan
  1. Small Business Administration (SBA) Loans

The SBA loan program is government-backed financing that is open to entrepreneurs who want to start a food truck business in the United States of America. Please note that the SBA issues what are known as microloans for businesses that may require small financing to kick-start their business.

Small Business Administration (SBA) loans help in reducing the risk lenders and borrowers are exposed to when looking for business loans. Despite the fact that Small Business Administration (SBA) does not technically loan the money to borrowers, they usually help in connecting borrowers to lenders.

The most popular SBA loan option is the SBA 7(a) loan. The SBA 7(a) loan is an all-purpose business loan that an entrepreneur can leverage to cover all the major expenses in their food truck business. Another type of SBA loan that a food truck business can apply for is the SBA 504/CDC loan. The SBA/CDC business loan is designed for food truck businesses.

  • A minimum credit score of 640
  • A good business plan document
  • Generate less than $7.5 million in revenue annually
  • Have less than 500 employees
  • Net income of less than $5 million after tax
  • Have a tangible net worth of less than $15 million
  1. Alternative Financial Institutions

Another sure source to consider when sourcing for business loans is from what is known as alternative financial institutions. Alternative financial institutions are non-bank financial institutions that also give out business loans. Some alternative financial institutions include loan sharks, loan apps et al.

Most alternative financial institutions usually offer merchant cash advances, invoice financing, and short-term loans. The truth is that most people turn to these institutions because it is easier to secure business loans from them than the conventional bank, although their interest rate might be crazy and their method of collecting back their loans might be crude.

  • Fair credit score (some may even approve a business loan for someone with a bad credit score)
  • Meet their collateral requirements
  • Business licenses and permits.
  • Personal and business tax returns.
  • Employee Identification Number (EIN)
  • Disclosure of other debt
  • Copy of your commercial lease.
  • Submit a business plan