Used food trucks Trucksbrands.com Already know where to buy a food truck? Or want know used food trucks for sale near me?
Can be bought through a financing or loan. If you’re looking for growing your food truck, consider financing. The industry is expected to grow 6.6% over the next five years. A food truck business can be cheaper than a restaurant, there is still a significant cost associated with this business.
Getting a traditional loan can be a challenge for owners. Fortunately, food truck owners who have a steady cash flow may qualify for food truck financing. A food truck loan helps buy a food truck and supplies, as well as invest in marketing.
Get Financing on Used Food Trucks
#1. Getting Qualify for Financing
Each lender has different criteria, but there are general guidelines. You must have been in business for at least six months and have $10,000 monthly income (or $100,000 for annual income). Some startups may struggle to find a bank loan, because you must in this business for two years.
You may need to provide a security for a down payment of used food trucks, especially if your credit does not meet the requirement. You may need a co-signer with good credit. If you are considering an equipment loan, you need similar qualifications and a 5-20% down payment if you have good credit.
Lenders may require a UCC statement, which impact on your qualify for other loans or your business’ credit report. For SBA loans, you may require to provide financial statements, tax returns, and a business plan. Through alternative lenders, they may simply ask you to complete an online application with few details.
#2. Financing Food Truck
The loan for used food trucks can be less than restaurants, but they can be higher than what you have in your bank account. There are several types of loans you can use to finance your business. It depends on what you need and what you qualify for.
Start by determining how much you need and what you are going to use it for. Look with which lenders you are eligible for loans. This will help you narrow the list.
#3. Credit Score You Need
Credit score requirements vary from lender to lender, but in general between 550 and 640 at a minimum. The higher your credit score, the lower the commissions. Also, the smaller the down payment to make on the loan of used food trucks.
#4. Financing Rate and Term
You can get up to millions of dollars and 16-year repayment terms for equipment loans. Annual percentage rates start at 3%. SBA microloans offer up to $50,000 with rates from 0% to 13% and have loan terms of up to six years.
Crowdfunding has no limit on the amount, but note that you will pay commissions to the platform (up to 5%), as well as processing fees (35%). If you don’t increase your target amount, you may not receive any funds to buy used food trucks. With food truck lines, you can borrow up to $250,000 with rates 5%.
#5. Will Bad Credit Prevent Financing?
Not necessarily. Different financing has different criteria, so if your rating isn’t high, shop around until get a decent rate. If you are looking for a commercial or an equipment loan, you may accept a lower credit score because they using it as collateral to reduce the risk if you are unable to repay the loan.
Be aware that if you don’t have good credit because the cost of loans may be higher. If you’re able getting a loan to build your credit, you’ll get better terms in the long run. The terms and offers depend on your qualification and your credit, as well as the financing you choose for used food trucks.