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!

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