How to Find Funding to Start Your New Food Truck
Food trucks are fast becoming one of the leading meal delivery and quick food options in the country. With so many people following busy schedules and living hectic lives, finding a food truck on the corner can help them to save time and money by picking up quick, quality meals.
If you are thinking about starting a food truck service, one of your first questions will be about funding.
Below are possible financial resources for starting your own food truck business.
Buy a Second-Hand Food Truck
Instead of making a substantial investment in a brand new food truck that will drain your savings or require hefty monthly payments, consider buying a second-hand food truck.
Check out online or local ads for a food trailer for sale to at least compare with a new truck.
Chances are you may be able to find a used vehicle in as good of shape for operating purposes as a new one.
Tap Into Your Savings
If you have a savings account with a balance that will cover the cost of your food truck startup, borrow the funds needed for some of the purchases.
The initial cost will be at least $50,000 to get off the ground, so you may not have quite that much to get started on your own.
However, you may be able to cover a few of the costs, like the business license, a down payment for your truck, and supplies.
Remember that when you “borrow” from yourself there is no guarantee that you will be able to quickly replenish your savings.
Use Your Home’s Equity
Homeowners may have enough equity in their property to qualify for a home equity line of credit.
Typically, these credit lines carry a lower interest rate as well as a lower monthly payment than many credit cards on the balance owed.
Put your home’s value to work by using funds from a home equity loan to finance your food truck.
Open a New Credit Card
You may be eligible to apply for and receive a new credit card with available credit that will cover the purchase of a food truck.
If your credit score is in good standing due to paying bills on time and maintaining a healthy debt-to-income ratio, you may receive stellar credit card offers with zero-interest for six to eighteen months.
The amount of credit you qualify for is based on factors like income and existing debt.
If your new food truck business takes off, you could pay off the credit card balance during the introductory period at zero interest before the new rate kicks in.
Do keep in mind that credit card interest is often to hire than interest rates for other funding sources.
If your business is slow during the first few years or you decide to shut down the operation early, it could be tricky to pay off the debt and the accumulating interest.
Buying a food truck could be cheaper than opening a brick-and-mortar restaurant in your area.
Look for good deals on new or used trucks and consider funding sources like these to get your business up and running.
Author Bio:
Anica is a professional content and copywriter who graduated from the University of San Francisco. She loves dogs, the ocean, and anything outdoor-related. You can connect with Anica on Twitter @AnicaOaks.
Category: Business
