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Can I Get Food Truck Financing with Bad Credit?

A food truck can present an amazing business opportunity. This is a fast-growing industry, as people are increasingly looking for fresh local food. Because of this, it’s estimated that the industry is worth $1.2 billion in 2022.

However, buying a food truck can be expensive. If you struggle with bad credit, getting the funding needed can be very difficult. Thankfully, it won’t be impossible. Let’s take a closer look at bad credit loans and how they work.

Who Provides Bad Credit Loan?

If you have bad credit, you’ll quickly find out that securing funding can be a challenge. Banks will take one look at your credit score and reject your application. The good news is that it isn’t impossible to get the financing you need to purchase your food truck.

It can help to turn to an alternative funding lender instead. There are a few critical ways that they are different from the banks. First, they aren’t as interested in your credit score, so bad credit OK. Plus, they work fast. You should be able to get the money into your account within a few days, rather than having to wait weeks for a bank to process your application.

Importantly, they tend to have better customer service. If you run into business trouble, you’ll be able to talk to an alternative lender. They might be willing to suggest some solutions or opt to change the agreement to better suit your needs.

What Bad Credit Loans Are Available?

There are a wide range of bad credit food truck loans that you can explore. It’s best to think about what you are looking for, to find the structure that will best suit you. Here are the loan types:

Equipment Financing

Let’s start by looking at equipment financing. In this type of loan, the items you purchase with the loan will act as collateral. In this case, it will be the truck and the equipment you are using. This means that you will be able to get a more attractive interest rate. The lender knows that they will be able to claim the assets if something goes wrong. After you have finished paying for the loan, you will legally own the equipment.

There are a few key facts that you need to know if you are considering equipment financing, these are:

  • Loan sizes between $250,000 to $1.5 million
  • Need to be in business for at least three months and have a minimum monthly revenue of $6,000.

Equipment Leasing

If you are looking for an alternative to equipment financing, you might want to consider leasing the equipment. In this case, you will need to make monthly payments. You’ll be getting the right to use the equipment, but you won’t legally own it when the lease period is over. In exchange, you’ll have lower monthly repayments.

Here are the key stats about this approach:

  • Must show three months of business experience and revenues of $6,000 per month to be eligible.
  • Leases are between six to 24 months

Merchant Cash Advance

A merchant cash advance is a great way for existing businesses to expand. In this case, you’ll be able to tap into a percentage of your working capital. The loan will be repaid based on a percentage of your future sales, making repayments easy. It also increases flexibility, if it’s a slow month for sales, you will have less money to repay.

Here are some of the crucial elements of a merchant cash advance:

  • You need to have between three to six months of business experience and a minimum monthly revenue of $10,000.
  • Minimum FICO score of 500.
  • You can get approved for between $5,000 to $50,000
  • Repayments can last for between four to 18 months

Business Line of Credit

Thirdly, you might want to consider taking out a business line of credit. In this case, you will get pre-approved for a certain amount. Then, whenever you need some extra capital, you’ll be able to dip into the line of credit. You’ll only need to pay interest on the money that you have taken out. Furthermore, you can continue to borrow against this line of credit, up to your approved amount, without the need to take out additional loans.

Here are the key stats that you should be aware of:

  • You need to have at least six months of experience in the business and have a monthly revenue of $25,000.
  • A minimum FICO score of 620
  • Repayments between six to 12 months
  • Approvals for between $10,000 to $500,000

Secured and Unsecured Business Loans

Next, you might want to consider either unsecured or secured business loans. There are two varieties that you can explore. You can either get a secured or unsecured business loan. Secured means that the loan will be collateralized. Should things go wrong, the lender will be able to reduce the risk by seizing some of your assets. As a result, these loan types tend to have lower interest rates.

While unsecured loans won’t require any collateral, you will be required to make a personal guarantee, which means that you will be held personally responsible if something goes wrong. It should also be noted that unsecured and secured loans through an alternative financing provider are easier to qualify for than an SBA loan.

Here are some of the things that you know about these types of loans:

  • Need three to six months of business experience and a minimum of $100,000 revenue each year
  • Payments are based on weekly or monthly repayments
  • Approval from $10,000 to $500,000

SBA Business Loans

Finally, you might want to think about taking out an SBA business loan.  This is backed by the government. There are a few activities that you can use these loans for. But the purchase of equipment is a valid reason, so you shouldn’t have any issues getting approval to use the money to buy a food truck.

Here are the key facts:

  • Requires two to three years in business or experience in a similar line of business.
  • The application process is more complex than other loan options

Other Financing Options

In most cases, a bad credit food truck loan is your best choice. But there are a few other financing options that you can consider, including:

  • There is a range of platforms that make this easier. But there are a few potential problems. First, you will need to offer an incentive for people to donate. Plus, there are lots of other competing businesses, so it helps to have an established reputation.
  • This will require you to have a clear business plan and the ability to convince people about the future of your business. Though they will require equity in the business.
  • If you own your home, you might want to leverage the equity to get a bank loan. But this can come with a lot of risks. If the business fails, you could lose your property. Plus, your bad credit means that you’ll be charged a high-interest rate to compensate for the additional risk.

Tips To Help You Get Approved for A Loan

If you are concerned about getting food truck financing with bad credit, you don’t have to worry. There are a few simple tips you can use to boost your chances of getting approved for a loan.

First, it’s a good idea to start looking at your debts and trying to pay them down when you can. Over time, this will help improve your credit score. It’s also a good way of showing lenders that you are committed to improving your financial situation.

Next, you should come up with a business plan. Sometimes, this will be required to secure a loan. But even if it’s not, it’s a good way of making sure that your food truck has the best chance of making money.

Finally, it’s a good idea to make sure that you understand your obligations before you apply for the loan. Though reading the agreements will only take a few minutes, this can save you a lot of problems in the future.

How Long Does It Take to Get Approved?

Food trucks are a highly competitive industry.  So, if you see a truck you like for sale, it’s vital that you move swiftly to take advantage of the situation. If you choose to go through a traditional lender, like a bank, this will be difficult. They can take several weeks to assess a claim and decide if they want to approve it or not. Even if you get approved, it will be a while before the money arrives in your account.

On the other hand, if you are using an alternative lender, it will be a relatively quick process. First, you’ll need to fill out a form. This will be completed online. Usually, it will only be a few pages long. The claim can be assessed within a few days. In most cases, you’ll have the money available within a few days.


Just because you have bad credit doesn’t mean that you can’t get financing for a food truck. There are lots of alternative financing options that you can explore, many of which are bad credit OK. If you want to learn more, the friendly team at South Florida Funding Group can help. Give us a call on 786-544-2700.


The business funding you need when others say No!.

2569 Bay Pointe Dr.
Weston FL 33327




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