How To Grow Your Food Truck Business Through Financing

Food trucks have evolved dramatically to become true culinary experiences on wheels—their owners are passionate about their cuisine, but have opted to maximize the efficiency and portability of their craft. The right food truck can produce that Michelin-star quality taste and customer satisfaction, without the hassle of making a reservation five months in advance. Just as the caliber of food that is served from a food truck should not be underestimated, the labor and financial sweat of launching a food truck enterprise is substantial. First you have to find a food truck, which comes with many options and costs.


For most entrepreneurs, those costs involve obtaining restaurant financing to sustain your enterprise (unless you’re sitting on a mountain of capital). Like running any other small business, financing is typically the determining factor for whether or not your food truck operation will stall, or continue to grow.

About Bond Street

Bond Street is here to support small business owners in their quests to expand, providing expedited lending that distills what has the potential to be—and oftentimes is—an arduous process. If your business has been operating for at least two years and brings in at least $200,000 annually, you are a candidate for Bond Street financing. While we do not work with startups, if your business fits the above profile and you are looking to expand your brick and mortar operation to a food truck, add additional trucks to your fleet, renovate your truck, and so on, Bond Street funding could be the path to execution for your business goals. We seek to eliminate many of the hurdles that small businesses face when applying for traditional big bank loans by providing fast, affordable financing.

Bond Street’s term loan is a great option for financing your food truck vision—let’s break down the basics of what, exactly, a term loan constitutes:

A term loan is a form of debt financing. It’s a lump sum (the “loan amount”) borrowed from a lender, and paid off at certain intervals, over a set amount of time (or “term”). Common use cases in which food entrepreneurs turn to term loans include (but are not limited to):

  • Opening a new location or expanding
  • Purchasing inventory or equipment
  • Operational costs
  • Refinancing high-interest debt
  • Expanding your team
  • Seasonal Budgeting

Bond Street offers term loans ranging from $10K–$1MM, with interest starting at 6% and terms from one to three years. What distinguishes Bond Street most from traditional lenders is its expediency in providing financing—a small business owner can apply online within 10 minutes, and then be approved in as little as three days (as opposed to waiting months from traditional banks)—fair rates, and, most importantly, an enhanced relationship between lender and borrower. Bond Street is heavily invested in the long-term success of our clients, and we focus on building relationships (and providing value) to our customers beyond the loan.

How to Put a Term Loan to Use

So, as a food truck entrepreneur, what exactly can you use a Bond Street term loan for? The expenses will likely seem endless as you embark on whatever project you’ve decided to take on so, really, your term loan can do—just about anything.  Whether you are expanding your brick and mortar establishment to a mobile counterpart (or vice versa), creating a food truck empire by expanding your current fleet of traveling kitchens, or revamping your truck because it’s not serving your needs, a term loan could be the answer to making these goals materialize. When Pepe Urquijo moved from San Francisco to New York City in 2009, he quickly realized that the city was missing something important: a good burrito. He resolved to create his own pop-up restaurant, B’klyn Burro, which quickly established a loyal customer base. As he prepared to open his first permanent location, he turned to Bond Street for a term loan to help make it happen.

food truck finance bond street

1. Equipment

Whether you’re buying, building or leasing, you’ll need capital to cover the costs of a food truck. If you’re buying a truck, the cost of a finished vehicle will vary dramatically based on the kind of food product you’re serving and your equipment needs. A smaller, coffee-kiosk-type truck could cost around $20,000, whereas, fully decked out kitchen truck prices can reach well over $100,000. The Roaming Hunger marketplace makes it easy to shop for a truck that will fit your business plan’s mold of equipment needs, is near your current location, and, then, once you’ve found the perfect fit, they’ll help you secure it. That being said, there’s a chance that when buying a used, as-is food truck, that it may be a fixer-upper, and repairs can quickly add up.  As Roaming Hunger breaks down, “a water heater failure costs up to $3,000, a deep fryer failure costs up to $5,000, a refrigeration and freezer unit failure costs up to $6,000, and engine, transmission, and drivetrain failure can rack up expenses to the tune of $12,000”.   When shopping for a truck, weigh the asking price against how old the truck is and what the future repair schedule could cost you as it may be worth it to initially splurge.

That being said, perhaps that perfect fit doesn’t exist—yet. If you’ve searched and searched, but your roaming restaurant has certain needs that you can’t give up but can easily delineate, you can build your own. In addition to their marketplace, Roaming Hunger offers a full build out platform, where you can use your creative genius to, first, design your menu, which will then dictate your equipment needs, and, finally, name your budget. They’ll work with you to tell you what’s feasible and what’s not by connecting you with a network of the most skilled builders, and you’ll end up with an ultra-custom, physical creation of your portable foodie fantasy. Building your dream “home” from scratch will require some upfront capital, and financing can help to cover the costs, without killing your cash flow.

2. Operating Costs

A food truck commissary is an incredibly important part of maintaining successful food truck business practices and one of several significant operating costs. Pro tip: do your research about the health codes, regulations, and laws in your area, compliance with these codes and maintaining a sanitary workspace will be the key to your truck’s success and longevity.  Think of a commissary as your truck’s home, your new neighborhood.  Commissaries provide a place to park and charge your truck, refill your propane and water, and dispose of waste; some commissaries have more extensive amenities like commercial kitchens, food storage space, truck maintenance, a place to send your inventory, ice refills, etc.  What you will need from your commissary will depend on how decked out your truck is, your food program, and, again, the relevant health regulations in your area. Your rent at a commissary can be anywhere between $250-$750, and, in a place like New York city, as a high as $1,000-$1,250—covering this rent in your loan application is a perfect example of what qualifies as an approvable loan request.


3. Inventory & More

Other, perhaps intuitive-seeming, uses for a term loan include funding your inventory and equipment supply, beyond initial purchases and reaching to general upkeep. Whether you’re starting fresh or expanding, chances are, you’re not doing it alone, and, unless you’ve found yourself a pro bono staff, you’ll need money to pay them—boom, term loan funds!  These traditional uses aside, term loans are rather flexible in fulfilling your business needs, and you have a degree of creativity that you can take in what you are requesting funding for.

Music festivals have recently become major hubs for food trucks—think Coachella—they are an incredible opportunity for marketing and exposure to customers, and also to link up with other food truck owners about talk about their tips and tricks. However, there are several costs associated with taking your truck to events. Many of the application processes include fees upfront to become a vendor and you’ll need to purchase inventory in bulk beforehand, as well as get your truck there, which means additional fuel costs, covering your staff’s transport, and a laundry list of other miscellaneous expenses. If you feel that your truck is ready to handle the increased traffic associated with an event but the costs alone are what is stopping you, a term loan could be the means to get you there.

Refinancing is sometimes a necessary means to free up the capital needed to facilitate your expansion. When Matt Gallira and Jimmy Warren founded Big Mozz, they may not have expected to become mozzarella stick and wood fire pizza masters, but that certainly is what the business has grown into. What started as a launch at Smorgasburg in 2015, has grown into a retail business unit and a product line, both which are set to expand rapidly in 2017; when Big Mozz came to Bond Street with the goal of consolidating their debt and paying off their credit cards to allow for infrastructure increases and movement into the music festival scene, they were approved for a loan and they received their much needed financing quickly.  Any new business owner understands the tradeoff between expansion and preservation of quality, even in the face of success. All of Bigg Mozz’s cheese comes from grass-fed cows from farms that the owners work directly with and they are unwilling to sacrifice this quality for anything.  Their loan has given them the breathing room they need to prepare for their next busy season.


What Now?

So you’ve weighed your options and you’ve decided that Bond Street is best for you—how do you apply and qualify? Well, first, you’ll want to make sure that your business meets our minimum requirements:

  • At least 2 years of operating history
  • At least $200K in annual sales
  • Profitable (or a positive net income)

If you’ve met all the marks above, you’ll need the following information on hand to apply:

  • Tax EIN
  • Balance Sheet
  • Income Statement

Prior to applying, consider how much capital you need to borrow, as well as how much your business can afford. You should also understand the cost of capital and how your business will generate additional funds with the loan. A term that’s often thrown around, but will help inform your request is ROI (return on investment). Using ROI as a guide can help you pinpoint those opportunities that offer the highest potential return, based on the amount you’re able to invest. Putting in the time to think through your loan request will ensure you don’t bite off more than you can chew.

Lastly, you’ll also want to review your personal and business credit score for any errors or inaccuracies that may be hurting your rating. Businesses whose owners have a credit score of at least 640 are most likely to qualify, but it isn’t the end-all, be-all—this is just one factor among many we consider. If you’re approved for a loan from Bond Street, you could receive your funding in as little as three business days.

This isn’t “A Guide on how to be a Successful Food Truck Guru.” Acquiring financing is a step on your path to success, not the end—your business plan has to be as airtight as your knowledge of your cuisine, but overcoming the financing hurdle is a good way to shift your focus away from “how will I get the cash to build and buy everything,” to what really matters—your food, your customers, and how to really grow your profits.