Editor’s Note: Today we’re excited to present a guest post from JSL Financial. JSL Financial specializes in providing hassle-free financing for small and medium sized businesses. You can find out more about JSL Financial by checking out their website.
Are you trying to break into the food truck industry but don’t have the funds to turn this dream into reality? If so, that is okay … as long as you are willing to get a bit creative.
You see, anyone can break into the mobile kitchen industry — if they really want to. No, that does not mean anyone can survive and thrive in this industry, because making it in this industry takes more than having enough cash to buy a food truck, equipment and all of the inventory.
If you want a spoonful of success in this industry, you have to come up with an epic business plan — and you have to be business savvy on top of that — and you also have to be a great chef. Those things are invaluable. However, let’s get back to the money/financing issue.
Always remember, where there’s a will, there’s a way. If you want to become a food truck owner bad enough, and you have a plan on top of that, then you can. Think of the money you need initially as a minor and short-term obstacle.
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With that said, let’s break down how a prospective food truck owner can get financing, which could lead to startup capital and/or you actually buying a food truck and all of the equipment that goes along with it. In other words, let’s break down the ins and outs of getting food truck financing.
The Ins And Outs Of Getting Food Truck Financing
If You Have Mediocre To Bad Credit
If you have mediocre credit, you can still finance a food truck. Heck, if you have bad credit, you can still make that dream come true. Of course, having good credit is ideal, but all is not lost just yet.
If you have mediocre or bad credit, then you are going to need a couple of things. First and foremost, you are going to need a cosigner who has good credit — that’s a must. Next up, you might need two more things: (1) Cash for a downpayment. (2) Collateral, such as a car or house.
If you do have a worthy cosigner, cash for a downpayment AND collateral, then you are well on your way when it comes to getting some financing, which means your dream of owning and operating a mobile kitchen could be just around the corner.
If You Have Good Credit
If you have good credit, then you aren’t in the clear just yet, but your chances of not only getting approved, but receiving a good rate, go up. So, what do you do if you have good credit and you are trying to finance a food truck?
You still might need two things: (1) Cash for a downpayment. (2) Collateral.
With that said, your downpayment might not have to be as great, and that is especially the case if you can use your home as collateral. Nonetheless, if you have good credit, then the uphill battle won’t necessarily be as steep or as tough — getting a dream food truck is a real possibility.
No Matter What, Quality Always Matters
Here’s the final in and out, if you will, to getting food truck financing. The quality of the food truck you are trying to finance has to be good. In other words, you can’t expect to get a piece of junk financed. Lenders do not want to dish out money on a vehicle (in this case, a mobile kitchen) that isn’t reliable. That is the same case when trying to finance a car (high mileage can lead to you getting declined, and it might not necessarily be your fault).
Look for a food truck that is reliable. Not only will that increase your odds of getting financed, but it could also increase your chances of your truck (or the equipment) not breaking down, which could cost you a ton of money in the long run if breakdown problems do arise.
Bonus Tip: A business plan — scratch that, an all-star business plan that maps out everything — could increase your odds of getting financed. You have to show these lenders you are good for the money. You have to show them numbers and a plan. In this case, you don’t have numbers from a real business yet, so you have to show them your plan.
Looking for financing to start or grow an existing food truck? JSL Financial has you covered.
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