Food trucks enable both entrepreneurs, family businesses, and professional chefs to quickly profit from a sustainable business. Running a food truck is a great career move because you get to be your own boss, test new products and cuisine concoctions, work flexible hours, and attract a loyal following within your community. However, knowing your financing options so you can invest from one of the best food truck builders is paramount to your success because it plays a role in your fresh start in business right out of the gate. In other words, if you secure the right financing that works for you, then you will be in a better position to succeed as you make your first run at operations.
Although financing a food truck requires less capital than financing a traditional restaurant, it still has its fair share of expenses. Whether you take out a bank loan, finance out of pocket, or take out a personal loan from family, you will need access to capital so that you can buy a food truck and make your dream come true.
This article is intended to help aspiring food truck business owners learn about their financing options, with a specific look at equipment financing loans.
If you are searching for a specific type of food truck loan that will help you finance the vehicle itself, or equipment like broilers, stoves and freezers, then equipment financing could be your ideal food truck loan best suited for your needs. This option enables you to get funding so you can purchase business equipment that serves as collateral for the loan.
Equipment financing is a form of secured financing, meaning you will be able to benefit from lower interest rates. Furthermore, you will be able to enjoy one of the longest stretched out repayment schedules in the market because lenders generally make the repayment terms as long as the projected life of the equipment you are financing. In fact, many successful food trucks started out with equipment loans and reported that, because the loan was affordable with easy-to-access options.
Should You Lease Food Trucks and Equipment, or Buy New?
Leasing business equipment (like a food truck or its appliances) preserves capital and offers flexibility out the gate. But, in the long run it could easily cost you. When you lease the initial expense is going to be less, as equipment leases rarely require a down payment meaning your cash flow will not take a hit. However, the overall cost will be higher. For example, a three-year lease on a POS system for your food truck worth $4000 at a standard rate of $40 a month per $1000 will cost the food truck owner more than $5700. So, if you buy it outright, the cost is only $4000. Now think about the numbers when we talk about friers, ovens, ranges and stoves, let alone the truck itself. Buying is always a smarter investment.
If you are a college student and you have the means to make an investment that will help you pay your way through college and give you financial support upon graduation, buying a food truck is a smart move. Call Legion Food Trucks today and learn how a custom food truck can serve the needs of your customers, and help make you highly successful.