Starting a food truck business can be a great way to generate a steady source of income in the long run. However, the capital needed to set it up may not be small for some people. Unless you have big fat savings account to finance everything yourself, you’ll have to look at different funding options to get your food truck up and running.
Why Getting a Bank Loan May Not Work for You
Getting a bank to approve your loan application requires a lot of homework on your part. First of all, your chance of getting approval depends a great deal on your credit score. If you have a messy credit history and a low credit score, your chance of getting denial is high.
Even if you have a good credit score, you still need a lengthy business plan to prove to the bank that you have thought it through and have plans to make your ideas work. If your business plan is not practical or there are some calculation mistakes in it, the bank may laugh in your face then deny your application.
The whole process from preparing for an application to getting the money in your hand can take months, which is time-consuming.
3 Alternatives to a Bank Loan
Getting a bank loan is not the only way to get money for your food truck business. Here, we’ll have a look at great alternatives that can get you the funds you need much faster.
KickStarter and GoFundMe are two crowdfunding platforms that have been gaining traction in recent years. You don’t need to submit a lengthy business plan to get your project in front of the people, however, well-presented ideas and widely shared proposals always work better on these crowdfunding platforms. Small donations add up over time, and you can send each donor a small coupon for a meal at your food truck as a token of gratitude.
The Small Business Administration’s Microloan program is for people who are looking to borrow less than $50,000. The average loan amount that most people apply for is just around $13,000. The conditions for these loans are much simpler than those of traditional bank loans. Plus, the money will get to your hands faster.
3. Family Members to the Rescue
You might not have that $30,000 to start a food truck business, however, your rich uncle might. While this option seems like the easiest one, it isn’t. You still need to treat the money your family entrusts you with like a formal loan and not let them down. Maybe make them your business partner. This way, both can work together to make the idea work, and as we all know, two brains are better than one.
Food Truck Financing and Loans
Legion Food Trucks is more than a manufacturer. We help business owners and aspiring entrepreneurs will all aspects of the food truck business. Contact us today to learn more about how to finance a food truck, and the loan options available.