Food trucks are a growing trend, and there’s no doubt that they’ll continue to be around for years to come. However, if you don’t have the money to start up a food truck business, you may have to take out a loan.
If you are looking for ways to finance your custom food truck, several options are available. Even if you have bad credit, you might even qualify for financing.
Tips for Getting Food Truck Financing With Bad Credit
Here are different tips to secure food truck financing with bad credit:
1. Try Boosting Your Credit Score
The first step in getting a loan for your food truck is boosting your credit score. You can increase your credit by paying off old debts, making sure you have enough cash on hand to cover the loan down payment and closing costs, and having an active account history. The better your credit score, the easier it is to get loan approval.
2. Build Down a Payment
It would be best to build down your monthly payments as much as possible. You can do this by finding a lender that offers low-interest rates or even zero percent interest loans. If you don’t qualify for a 0% interest rate loan, look into other lenders who offer lower interest rates.
3. Find Out What Type of Loan You Qualify For
Once you know what type of loan you want, find out which lenders will lend money for food truck financing with bad credit. Many loans are available, including fixed-rate and adjustable-rate mortgages. Some lenders may only give you a certain amount of money based on your income level, while others will let you borrow more if you need it.
There are different food truck financing options available, such as:
A fixed-rate mortgage means that your interest rate won’t change until the end of the term. Most banks will tell you exactly when they expect their interest rates to go up so that you can plan accordingly.
However, some borrowers worry about how long it takes to pay off such a large loan. A more extended repayment period can help you save money because you won’t make extra payments during the early loan.
Adjustable-rate mortgages (ARM) are like fixed-rate mortgages, except they allow your interest rate to fluctuate throughout the loan length.
The good thing is that ARM loans usually come with an introductory rate that adjusts annually. But, once your initial rate goes up, you’ll still be responsible for any additional increases.
No Money Down Loans
No money down loans require no down payment from you. Instead, you put all the money towards the purchase price. Of course, there are drawbacks to not putting anything down. First, you could lose a lot of equity in your home if you decide to sell later.
4. Apply Online
Apply online once you have found a few lenders that you think might approve you for a food truck business loan. Many lenders now allow you to apply for a loan without ever meeting them in person. It saves time and makes applying for a loan faster.
5. Pay Off Other Debts Before Applying for a Loan
If you already owe any debt, make sure you pay it off before applying for a loan. Lenders usually require you to prove that you have paid all your bills on time.
Get Your Food Truck Financing Today!
Getting food truck financing with bad credit can seem daunting, but it doesn’t have to be. By following these tips, you’re more likely to get approval for a loan. For customized food trucks, contact us today.