When veteran Don McPeck and his son Jake, a chef, won Food Network’s two-day completion for their riff on mess hall themed cuisine, they won a one-year lease on a custom-built food truck, and the concept for Mess Hall Canteen was launched. In 2016, when their prize lease was up, Don and Jake set out to purchase the truck from Kareem Carts in Los Angeles, one of Opportunity Fund’s long-term mobile food truck partners.
We helped Mess Hall Canteen secure the $77,000 loan they needed to own their truck, and their business, outright. Because we’re a mission-driven nonprofit small business lender, we’re able to say “yes” to small business owners when traditional lenders can’t. While the mobile food industry has exploded in recent years, the post-Great Recession environment at traditional banks still isn’t hospitable to start ups in industries that don’t fit their mold.
What To Look For When Financing Your Food Truck
When looking to start financing your food truck, it’s important to work with an established and respected manufacturer and a lender that looks beyond the boxes on a loan application. A lender that focuses on mobile food truck lending knows that a FICO isn’t the whole story, and that other considerations such as past food service experience can be better indicators of future success.
Here are some tips for getting a strong start financing your food truck business:
- Understand the value of your life experience and be able to communicate it with conviction to your loan advisor. What inspires you? What have you learned through food service experience? What kind of relationship do you want with your customers? What do you know about the communities you will serve?
- Be conservative in projecting revenue and expenses. A business loan should make it easier, not harder to run your business. If your projections are unrealistic, you could end up with more debt than your revenues can support and that unnecessary stress makes it hard to serve up your best product.
- Continue to communicate with your lender, even after you’re on the road. We want to hear when things are going great, and when they might not be. As a mission-driven lender we want small businesses to succeed and grow and will work with borrowers during the inevitable ups and downs that come with being your own boss.
- Look for the best terms and make sure you feel comfortable with your lender. Because we’re partners with respected manufactures, and mission-driven, we can offer 11.5% interest rate for all mobile food truck loans, regardless of FICO, along with less expensive merchant services. Some offers look may not be as good as they look, do your research.
RELATED: Financing A Food Truck In A Tough Economy
About The Author
Devin McAlpine has dedicated his career to supporting underserved and Hispanic communities. For the last 13 years, he has worked at Opportunity Fund as Business Advisor and Director of Microlending, overseeing the nonprofit’s Mobile Food Truck Partner Program in California. He is currently heading the expansion for mobile food lending to 12 other states. Devin currently serves as Treasurer on the Board of California Association of Micro Enterprise Opportunity.
