Food Truck Financing Options

Funding has always been one of the biggest challenges for entrepreneurs who are trying to start a mobile food business. Though starting a food truck business would require lower capital to get up and running compared to launching a brick-and-mortar restaurant, a potential owner must not miscalculate the amount of money required. Knowing the different options on how to raise funding and weighing which are the ones that will be best suited for your business can greatly impact its future success.


If it is available, there are some advantages in using your own money to start a business. Self-funding a food truck means not incurring debt in the beginning of the business life-cycle, making loans an available option for future needs. Also, using your own money means you keep all the profits earned by the business. This is rather beneficial because your business will have a bit of flexibility to grow instead of being forced to generate a certain amount of revenue so that a loan can be repaid.

Though self-financing is one of the best way to fund a start-up, it can only be done if you actually have enough available cash at hand. For those who do not have savings that can be used as capital, it can take quite a while to raise a significant amount of money. This can lead to you shelving the business idea temporarily or taking another route to financing your start-up.


For many people, borrowing money can be a touchy subject. Whether it is from family, friends, or financial institutions, debt has a negative connotation in most people’s minds. But taking up a loan is not always bad as long as it can be considered as “good debt”.

loanGood debt is money borrowed with the potential to gain a return through investment. But before rushing to the nearest bank, try to consider asking your family and friends first if they can lend cash that will help jump-start your food truck business. The advantages of borrowing capital from family and friends are the flexibility on interest rate and repayment period. More often than not, relatives and friends will only ask for the lowest interest rate (some may even forego it completely) and they will be more lenient in case of missed repayments.


Borrowing money may look more appealing now but what if your family and friends do not have the funds? An entrepreneur’s next option are financial institutions, particularly, banks. Getting a loan from a bank is a whole different scenario. Unlike close personal relations where the negotiation and approach to borrowing can be informal, approaching a bank will be a no non-sense affair.

moneyQualification is a big factor in getting a bank loan. A good credit history is very important and having previous business experience and no outstanding debts can increase your chances of getting the loan approved. Another big factor is the presentation of your business idea and financial plan. A fully-formed business idea with market research, financial projections, and even an exit strategy (or strategies) can improve the perception of your venture’s viability and reassure the bank that the loan will be repaid.

One of the disadvantages when it comes to getting a loan is the reduction in profits. Allocating a certain amount of your business revenue for repayments would mean your financial goals (whether personal or professional) may take longer to reach. Another drawback is having to worry about monthly loan repayments that can give added stress or distraction which can impact your business performance.

Seeking Investors

Another way to get financial assistance from family and friends is by inviting them to become investors. The advantage of asking for investment instead of a loan is the spreading of financial risks. In case the food truck business fails, a loan will still have to be repaid but an investment does not have to be returned. Also because dividends are based on profits, the operating budget of your business does not need to be reduced just to give returns to investors, making this financing option less stressful and less risky than incurring debt.

But having family or friends as investors can put a strain on your relationships if the details of the investment are not spelled out comprehensively. Adhering to a “company constitution”, a list of rules and roles that will guide the business owner and investors on what are to be expected from them, can prevent any complications from arising. Depending on your preference, you may let investors participate in running the business. But persuading investors to be silent partners is an option that can stop the business drama from spilling over to your personal relationships.


The rise of online crowdfunding platforms give mobile food entrepreneurs a new way of financing their dream businesses. Most crowdfunding websites are intuitive enough that setting up an account and starting a campaign will only take a few minutes. And with a great idea, presentation, and right incentives or rewards, people can back your food truck idea with monetary contributions.

Crowdfunding is considered as a low risk financing option for mobile food businesses because an entrepreneur only need to have a compelling idea, commitment, and a bit of creativity in spreading the word about the campaign. This is a unique way to fund and even run a business because the marketing part happens even before the product is available to customers. There are also insights to be gained based on people’s reactions to the campaign, giving entrepreneurs valuable data that can be used to tweak and improve the original idea.

Customer participation also has a positive effect because backers can become “evangelists”, as long as the promises of the crowdfunding campaign are fulfilled. Taking part in the building of a business by backing it through crowdfunding makes most people feel invested on its success, even if they are technically not considered as investors because they will not get future returns beyond the rewards offered during the campaign. This sense of “investment” is a powerful psychological pull that mobile food business owners can capitalize to create brand loyalty and also attract the interest of other customers.crowdfunding

Yet, despite the simple mechanics of crowdfunding, it is not as easy as making an awesome presentation video. It is low risk because entrepreneurs do not have to shell out a lot of money to get started. But creating a compelling narrative that will persuade people to give you their money is an art on itself. Differentiating your food truck idea in a crowdfunding platform can be a challenge today, with the industry starting to saturate as more mobile food business launch year after year.

Also, planning the campaign very carefully is crucial. Many crowdfunding initiatives fail because entrepreneurs underestimate the amount of work, commitment, and consistency needed. Some also set funding goals without careful cost-benefit analysis that either makes it impossible to achieve or cause the business to run out of money right after launching. Failure to deliver on your campaign promise can also lead to irreparable damage to the food truck’s brand, so only offer realistic rewards in exchange to people’s backing. It is also worth noting that in some crowdfunding platforms, money will not be released if the final goal is not reached. Some entrepreneurs may find this discouraging and may think all the hard-work during the campaign had been for nothing. It is best to learn and understand how a crowdfunding platform work before utilizing it to fund your food truck business.

quote1Cash is the life-blood of any business. But as a food truck entrepreneur in the twenty-first century, you have a lot more options than those who came before you. With a compelling idea, steadfast commitment, and a bit of creativity, you will realize that there are always options to solve financing challenges for today and even those that will come in the future.

Thank you for reading!

Be sure to check on our Twitter and for more information about Food Trucks and check back here for more blogs!

By |March 28th, 2016|Categories: blog, growing a food truck business, payments, starting a food truck|0 Comments

Why Food Trucks Should Accept Apple Pay

Perception has always been a powerful factor that affects businesses. And the integration of high technology to the everyday lives of customers is starting to influence how they evaluate, choose, and pay for products and services today. As the near-omnipotent smartphone pushes the boundaries of convenience, mobile and contactless payments like Apple Pay are gaining more traction, setting expectation, and affecting perception on businesses that could not keep up with the changing technology and behavior of consumers.

card_photoDue to their mobile nature, food trucks project a certain expectation of convenience to customers and can greatly benefit from utilizing mobile payments. But choosing the right system is vital. There are many products and services that offer food truck owners the ability to integrate mobile and contactless payments into their operations, but most are designed as accessories to consumer-grade hardware. Some have limited functionality, lacking the ability to process contactless payment transactions like Apple Pay. This can give a “non-professional” impression to customers.

Food trucks need proper mobile point-of-sale systems like the Clover Mini and Clover Mobile that are designed specifically to accommodate any type of mobile payment: conventional Magstripe cards, EMV chip cards, or contactless payments like Apple Pay. In addition to accepting various types of payments, the Clover Mini and Clover Mobile deliver integrated hardware and design that can streamline operations and elevate customer perception, which include:

Neat and compact sizepay_photo
3G and Wifi connectivity
Front-facing camera (barcode and QR code reading)
Rechargeable lithium-ion battery (Clover Mobile)
Built-in printer (Clover Mini)
Antimicrobial touch display with on-screen signature capture (Clover Mini)
Customizable system using applications
Cloud-based data storage


Investing on a mobile point-of-sale system that is feature-rich and “future-proof” is important for food trucks. Apple Pay is the latest contactless payment option now available to customers. With more and more companies adopting the payment service, many believe that use of Apple Pay is going to grow even further in 2016. According to a 2014 Business Insider article, one million credit cards have been registered to Apple Pay in the first 3 days of availability and made it the largest mobile payment system in the US, at that time.


Despite having contactless mobile payment options before Apple Pay, the service is getting attention due to its simple, integrated, and secure features. Utilizing the Touch ID sensor in the latest iPhone models, Apple Pay solved inconveniences and issues that many experience in other platforms. When integrated to your food truck business, there is no need to ask for identification cards or signatures from customers anymore because their identity has been verified by their fingerprint. Business liability for fraudulent cards are also minimized or even eliminated, saving entrepreneurs from financial losses and needless stress.


In addition, the natural motion of holding the phone and touching the biometric sensor speeds up the payment process and turnaround for each purchase. Shaving off even a few seconds by eliminating the act of “getting wallet from pocket, taking card from wallet, handing card to cashier, swiping card, signing receipt/typing PIN/checking ID, giving card back, putting card to wallet, and putting wallet to pocket” results to faster food truck service and more satisfied customers.

Apple Pay is also great for customers who do not want to share their personal information. Without the need to give a physical card, customers do not have to show the cashier their name, account number, or security code. Customers are also reassured that they will not be victims to crimes like card skimming.

quote2With more merchants integrating Apple Pay to their system this year, food truck owners should consider accepting the contactless mobile payment to reap the benefits linked to it. On top of faster and safer transactions, food trucks that can accommodate Apple Pay can enhance customer perception of the business and help boost brand value. If Starbucks, KFC, Domino’s Pizza, and Cinnabon believe it is worth integrating, maybe your business can benefit from Apple Pay too.

Need help on how to start accepting Apple Pay in your food truck business? We can help!

Thank you for reading!

Be sure to check on our Twitter and for more information about Food Trucks and check back here for more blogs!

By |March 14th, 2016|Categories: blog, growing a food truck business, payments, starting a food truck|0 Comments

EMV: Protect Your Food Truck From New Credit Card Regulations

Come October 1, 2015 there will be a big change in credit card processing. On this date, new credit card standards called EMV will take effect. This switch is an effort by major credit card companies to battle fraudulent charges. The system is already widely used in Europe and it’s now coming to the US where half the world’s credit card fraud happens. The EMV system couples an updated POS system with credit cards that contain microchips instead of the standard magnetic strip we’re used to.

What this means for retailers is that as of October 2015, if a fraudulent charge occurs at your food truck (on a credit card with a microchip) through your swipe and sign POS system, you are going to be held liable for those charges. And yes,  the entire ticket amount!

Food On A Truck is a food truck POS system. We have designed the software specifically with your business needs in mind. This includes protection from credit card fraud. We’ve planned ahead and made sure that our food truck POS system will be able to handle EMV charges so you can focus on food service.

What is EMV?Food Truck

EMV stands for Europay, Mastercard, and Visa. It references the three companies that began the change in technology to better protect consumers and credit card companies from fraud.

It’s not entirely new technology, the EMV system is already being used in over 80 countries. It’s taken longer to hit the US because of the complexity of the American market. Credit cards with microchips have been around since 2002, you may even have one yourself.

What does it mean for my food truck?

It means that you should update your food truck’s POS system to one that is EMV compliant to avoid taking on the liability of fraudulent charges. Food On A Truck is safe, secure, and already capable of handling EMV transactions. We’ve gone out of our way to make sure that we offer our users the best possible food truck POS experience possible.

Food On A Truck’s POS hardware will be able to accept credit cards with a microchip that don’t require a swipe of a magnetic strip. Customers with these credit cards may have the option (depending on their bank) of attaching a PIN to their card for an additional layer of protection. Food On A Truck’s EMV-enabled POS system will actually read the chip on the card and make sure that it’s valid. It’s an incredibly secure way for your customers to spend money.

How will Food On A Truck protect me?

Food On A Truck is ready and able to handle all EMV transactions. FOAT will:

  • reduce skimming during transactions at your food truck
  • allow your truck’s customers to use a PIN
  • will detect and prevent use of counterfeit, lost, or stolen card

Ultimately, the FOAT system is better for you and your customers: they won’t have to worry about their lost or stolen card being used at an unprotected business and you don’t have to worry about assuming liability for fraudulent transactions. It’s win/win.

What should I tell my customers?

When you’ve switched your food truck’s POS system to Food On A Truck’s app, you can let your customers know that their information is safe. Clover’s system offers a higher level of security than the consumer grade hardware used by other frequently used food truck POS systems like Square.

We know changes like this can be jarring and worrisome for small businesses, but we’re here to help. If you have more questions about how Food On A Truck can help keep your business assets protected, get in touch with us or Tweet at us – we’re happy to help.

Get on Food On A Truck’s email list to be notified about details of our October launch and ensure that your food truck is protected when the EMV switch occurs.

By |September 20th, 2015|Categories: blog, payments|Tags: , , |0 Comments