Owning and operating a food truck is an exciting way to build a business on wheels.

But food truck owners often face unique challenges, especially when it comes to financing.

Whether you need capital to buy a new truck, repair your vehicle, purchase ingredients, or expand your business, finding quick and reliable funding is crucial.

One financing option some food truck owners consider is a vehicle title loan. But how do these loans work?

Are they a good choice for food trucks? What companies offer them, what rates do they charge, and how do you apply?

This article breaks down everything you need to know about vehicle title loans for food truck businesses, helping you decide if this funding path fits your needs.

What Is a Vehicle Title Loan?

A vehicle title loan is a type of secured loan where you use your vehicle’s title as collateral to borrow money. Essentially, you pledge ownership of your vehicle—often the truck itself—to the lender in exchange for a loan.

If you fail to repay the loan on time, the lender can repossess your vehicle to recover their money.

These loans are usually short-term and offer fast access to cash, which can be tempting for small business owners facing urgent expenses.

How Do Vehicle Title Loans Work for Food Truck Businesses?

For food truck owners, a vehicle title loan works like this:

1. Application: You apply by providing proof of vehicle ownership, personal identification, and sometimes business documentation.
2. Loan Offer: The lender evaluates your vehicle’s value and your ability to repay. They then offer a loan amount based on a percentage of your truck’s value, usually between 25% and 70%.
3. Loan Agreement: You agree to the terms, including the loan amount, interest rate, repayment schedule, and any fees.
4. Funding: Once approved, the funds are usually deposited quickly, often within 24 hours.
5. Repayment: You make payments according to the agreed schedule. If you repay on time, you get your title back once the loan is fully paid.
6. Repossession Risk: If you miss payments, the lender can repossess your vehicle, which can halt your food truck business.

Companies That Offer Vehicle Title Loans to Food Truck Owners

Many lenders specialize in vehicle title loans across the United States. Here are some reputable companies that food truck owners might consider:

1. TitleMax

TitleMax is one of the largest vehicle title lenders in the United States, operating over 1,100 locations across 16 states. The company offers both online and in-store title loan services, providing fast access to cash for individuals who own their vehicles outright. This makes TitleMax a potential option for food truck owners seeking quick financing solutions.

• Loan Amount: Loans range from $1,000 to $25,000, depending on vehicle value.
• Interest Rates: Annual Percentage Rates (APR) can vary widely, often between 36% and 300%.
• Repayment Terms: Terms typically range from 30 days to 12 months.
• Application Process: Apply online or visit a local TitleMax store. Requires vehicle title and ID.
• Requirements: Vehicle ownership with a clear title, proof of income, and vehicle inspection.

2. LoanMart

LoanMart is a prominent provider of vehicle title loans, offering flexible repayment options and swift funding to eligible borrowers. Their streamlined application process allows food truck owners to access funds quickly, often within a business day, which can be crucial for addressing urgent business needs such as equipment repairs or inventory purchases.

• Loan Amount: Loans generally range from $1,000 to $15,000.
• Interest Rates: APRs vary, with some rates around 36%–150%.
• Repayment Terms: Typically 30 days to several months.
• Application Process: Online or in-person application, with vehicle inspection.
• Requirements: Clear vehicle title, photo ID, proof of income.

3. Ace Cash Express

ACE Cash Express offers vehicle title loans with quick approval and flexible terms, providing fast access to funds for eligible borrowers. Their application process is straightforward, and they do not conduct traditional credit checks, which means applying won’t impact your FICO® score.

Loan amounts can reach up to $5,000, depending on the value of the vehicle and state regulations. Approved applicants may receive funds instantly via debit card or direct deposit, and in some locations, same-day cash pickup is available.

• Loan Amount: Loans from $500 to $10,000.
• Interest Rates: APRs range broadly, sometimes over 100%.
• Repayment Terms: Usually 30 days to 12 months.
• Application Process: Online or at store locations.
• Requirements: Vehicle title, valid ID, proof of income.

4. Blue Trust Loans

Blue Trust Loans offers short-term installment loans with a streamlined online application process. Applicants can receive funds as soon as the next business day, provided they meet the eligibility criteria and complete the necessary steps.

The loan amounts range from $100 to $3,000, with terms up to 9 months. Interest rates are notably high, with APRs between 471.78% and 841.45%, depending on the loan duration and origination fees. While the application process is quick and does not impact your credit score, borrowers should exercise caution due to the substantial costs associated with these loans.

• Loan Amount: $500 to $5,000.
• Interest Rates: APRs are typically high, reflecting short-term, high-risk loans.
• Repayment Terms: Short-term, often 30 days.
• Application Process: Online, fast approval.
• Requirements: Vehicle title, ID, proof of income.

Typical Rates for Vehicle Title Loans

Vehicle title loan rates can vary significantly by lender and state regulations, but here’s what you can generally expect:

• Interest Rates: APRs often range between 36% and 300%.
• Loan Fees: Origination fees, processing fees, and late fees can add 10% or more to the cost.
• Short Terms: Most loans last from 30 days to 6 months, meaning high costs are compressed into a short timeframe.

Because of these high costs, vehicle title loans are best viewed as last-resort financing for urgent needs.

Application Process for Food Truck Owners

Applying for a vehicle title loan typically involves the following steps:

Step 1: Verify Vehicle Eligibility

Your food truck must have a clear, lien-free title to qualify for a vehicle title loan. Many lenders also require the vehicle to be newer than a specific model year and may set mileage limits. These criteria help ensure the truck’s value is sufficient to secure the loan.

Step 2: Gather Documentation

Prepare:

• Valid government-issued ID.
• Proof of income or ability to repay.
• Vehicle registration and title.
• Proof of insurance (depending on lender).

Step 3: Apply Online or In-Person

Most lenders provide easy online application options for quick convenience, allowing food truck owners to apply from anywhere. However, many still require an in-person visit for a thorough vehicle inspection to verify condition and ownership. This step ensures the truck meets lender standards before final approval and funding.

Step 4: Vehicle Inspection

Some lenders require a physical inspection of your food truck to accurately assess its condition and market value. This step helps determine the loan amount and ensures the vehicle meets the lender’s standards. Inspections may take place at a branch, partner location, or through a mobile service.

Step 5: Receive Offer

Based on your food truck’s appraised value and submitted documentation, the lender will present a loan offer outlining the approved amount, interest rate, applicable fees, and repayment schedule. Reviewing these terms carefully is essential to ensure the loan fits your business needs and that you can comfortably meet the payment obligations.

Step 6: Review and Sign Agreement

Carefully review all loan terms, including interest rate, repayment period, fees, and penalties. Make sure you understand the total cost of the loan. If everything looks acceptable and meets your business needs, you can sign the agreement either electronically or in person, depending on the lender’s process.

Step 7: Receive Funds

Once your vehicle title loan is approved, funds are typically disbursed within 24 hours. Most lenders offer direct deposit into your business bank account for fast access, while others may provide a paper check or prepaid debit card. Quick funding helps address urgent food truck expenses or cash flow needs.

Requirements to Qualify for a Vehicle Title Loan

Food truck owners should expect these basic requirements:

• Clear Vehicle Title: The truck’s title must be free of liens.
• Proof of Ownership: You must prove you own the vehicle outright.
• Valid ID: Government-issued identification.
• Proof of Income: Pay stubs, bank statements, or tax returns demonstrating repayment ability.
• Vehicle Condition: Some lenders require inspections to confirm vehicle condition.
• Minimum Vehicle Value: Usually, the vehicle must be worth a certain minimum amount, often $2,000 or more.

Is a Vehicle Title Loan Right for Your Food Truck?

Vehicle title loans can offer quick cash but come with high risks and costs. Here’s how to decide if it’s a good fit:

• Consider your urgency: If you need funds fast to fix a broken truck or cover unexpected expenses, a title loan may help.
• Assess your ability to repay: Can your food truck’s daily sales cover the loan repayments without jeopardizing operations?
• Weigh other options: Explore alternatives like SBA loans, merchant cash advances, or equipment financing before turning to title loans.
• Understand the risk: If you miss payments, you risk losing your food truck—your livelihood.

Tips for Food Truck Owners Using Vehicle Title Loans

• Read the fine print: Understand all fees, interest rates, and repayment terms before signing.
• Plan repayment carefully: Have a clear budget for paying off the loan quickly.
• Shop around: Compare rates and terms from multiple lenders.
• Avoid rollover loans: Don’t extend or roll over your loan, as this can trap you in a cycle of debt.
• Maintain your vehicle: Keep your truck in good condition to maximize its value and avoid repossession.

Over and above, vehicle title loans can provide food truck owners with a fast source of cash when time is tight and other funding options aren’t available. However, the high interest rates and risk of losing your vehicle mean they should be used cautiously and as a last resort.