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How 4 Food Truck Owners Got the Money to Start

Elizabeth Kellogg

Contributing Writer at Fundera
Elizabeth is a marketing and communications consultant who specializes in expansion, strategy, and branding. With a background in ecommerce, tech, and lifestyle, she's written and managed digital media campaigns for websites and corporations including Glamour and Amazon.

If you think you’re seeing more food trucks lately, your eyes don’t deceive you. In the US Chamber of Commerce Foundation’s “Food Truck Nation” study, researchers found that mobile food enterprises accounted for an impressive $2.7 billion in revenue in 2017. That’s up from a mere $650 million in 2014—more than a 400% increase over three years. Although that figure accounts for only a small percentage of prepared food sales nationwide, analysts predict continued growth throughout the industry.

If those stats surprise you, think objectively about mobile food enterprises for a minute: As job dissatisfaction and uncertainty proliferates, food trucks allow both professional chefs and anyone with a dream to quickly stand up a business. And a great one, at that—you can be your own boss, have a flexible work schedule, test new products, and grow a loyal following. All without large capital expenditures and huge overhead.

Still, you need to pay for your truck (or trailer or cart, whatever your style) somehow. We talked to four of these entrepreneurs, and their stories of how each proprietor came to build their business are as unique as the food they serve.

The Tasty Yolk (Bridgeport, Conn.)

After graduating from the University of Miami Business School, Mike Bertanza returned to his native town of Fairfield, Conn., to work as a Registered Financial Advisor at a local bank. Coincidentally, his childhood best friend, Eric Felitto, had attended culinary school and become the head chef at a restaurant in the very same plaza. The two spent all their breaks together, and noticed that the growing student population from the local college needed convenient, inexpensive, and tasty breakfast food to grab before class.

When Mike saw a food trailer at a local beer festival, the idea for The Tasty Yolk was born. The pair had previously discussed buying a food truck, but decided it wasn’t financially in the cards. But with the help of friends in construction, they transformed two motorcycle trailers into fully outfitted commercial kitchens.

Fast forward two years: The Tasty Yolk now serves 300 to 400 breakfast wraps and sandwiches per day.  With high-end meats and farm-fresh eggs, oozing with gourmet cheese, and set between custom-made brioche buns or hearty tortillas—all locally sourced—these are not your average breakfast creations. In 2017, MSN named The Tasty Yolk as one of the country’s 100 best food trucks.

Fund Your Food Truck with a Business Credit Card

The Tasty Yolk’s Bertanza bought his first trailer using a personal credit card with a high credit limit, which he qualified for because he had good credit and normally doesn’t carry high balances. “We needed money right way, and we used a credit card because it was simple and effective,” Bertanza says.

A credit card can work well for starting your venture, though we’d recommend a business credit card in favor of a personal card. That way, you’ll keep your personal and business transactions separate for tax and administrative purposes, your enterprise builds its own credit, and your company may be eligible for unique perks, depending on the card you choose.

We especially like 0% intro APR business credit cards, because you’ll pay no interest during that introductory period—which can last even more than a year on some cards—and you can pour all your profits into growing your business. After your interest-free months are up, a variable APR will set in at a rate depending on your creditworthiness and the market prime rate. So, you’ll want to make sure you can pay off what you’ve accrued—but with what’s effectively an interest-free loan for several months up front, you should be able to budget to do so if you work closely with a great accountant.

Mustache Pretzels (Phoenix)

For Greg Golden, what started out as a joke turned into a goldmine. Roll your eyes at the pun, but Golden would probably appreciate the wordplay—after all, he runs a business called Mustache Pretzels. Their slogan: Great mustaches aren’t born—they’re bread.

Although Golden is a former forensic accountant at one of the top four firms in the country, humor is more his style than numbers. “In the public accounting world, people would talk about what they were going to do once they got out… and I jokingly started telling people that I’m going to quit and sell pretzels shaped like mustaches. The more people I told, the more people said, ‘That’s actually pretty funny. You should do that.’”

Still, he didn’t take the idea seriously until his wife, Amanda, was unexpectedly transferred from Philadelphia to Phoenix  in 2014. He says:

I was staring down the barrel of another 30 to 40 years doing something I wasn’t super jazzed about, so my wife’s job moving us out to Arizona gave me an excuse to hit the reset button … I had no debt and no kids, so if this was going to happen, it had to happen then. When I was 25, I bought a food truck and started Mustache Pretzels … I figured, ‘This is interesting, and if I fall flat on my face, I still know how to do accounting.’

The gamble paid off. What started as one food truck has grown into a mini empire. Mustache Pretzels now has a kiosk at the Phoenix Convention Center and a storefront set to open this fall in the Phoenix Sky Harbor Airport. Plus, the shape of his pretzels is now trademarked by the United States Patent and Trademark Office. (This part isn’t a joke.)

It’s not just the unique concept that people appreciate, but the taste as well. For the last three years, Mustache Pretzels has received the distinction of Phoenix’s Most Loved Food Truck from the reputable mobile food community Roaming Hunger.

Fund Your Food Truck with Equipment Financing

Mustache’s Golden used a mixture of funding options to get his enterprise off the ground. He bought the first truck with his own money, with help from two colleagues who remain part of the business. He also worked with a small startup to pay for added equipment in the truck in exchange for social media exposure. Plus, the seller of the trailer financed the purchase himself at 7% over one year.

Not everyone can snag a corporate sponsor or convince the seller to carry the loan, so consider equipment financing when you’re ready to get your food truck business off the ground. Since an equipment loan is self-collateralized—meaning that the equipment you buy with your business financing serves as collateral for the loan itself—these loans are actually easier to get than traditional term loans. So, even if you don’t have an established concept and customer base, you might still qualify for equipment financing from an online lender—especially if you have a strong personal credit history.

Your lender will want to see your credit score, of course, and an equipment quote, too. Something to think about: According to Forbes, a savvy entrepreneur should consider buying used equipment, particularly from reputable sources like the US government. Check GovSales and the Defense Logistics Agency to get started.

Holyoke Hummus (Holyoke, Mass.)

When spouses John Grossman and Dawn Cordeiro moved from their native Boston to the small city of Holyoke, Mass., they had a son on the way. In search of space and community for their growing family, they joined a pop-up potluck group of passionate foodies who turned out to be aspiring restaurateurs. Ultimately, the group became the test group and cheering squad for Holyoke Hummus Company.

Both Grossman and Cordeiro worked for nonprofit organizations, and knew little about food as a profession. Inspired by the Middle Eastern food carts throughout New York City but lacking through the Pioneer Valley, Grossman and Cordeiro began selling their hummus and falafel in 2014. First, they sold their dishes out of a tent on the sidewalk in downtown Holyoke, then from a table inside a neighborhood arts center. Finally, they set up in a full-fledged food truck and a refrigerated trailer.

The learning curve was steep. Thanks to a local entrepreneurship accelerator called SPARK, and subsequent grants received through the program, the couple expanded into a brick-and-mortar location and into retail, with an eye toward grocery stores.

The restaurant has been open for over a year, and Grossman reports that revenue has spiked from $20,000 in the company’s first year of operation to more than $200,000 in 2017, with a whopping 50% growth rate month-over-month in 2018.

Fund Your Food Truck with an SBA Microloan

Holyoke Hummus used a crowdsourcing campaign to purchase their initial tent, tables, and food processor. Through their pop-up shop, Grossman and Cordeiro met Common Capital, a certified CDFI community lender, which provided the loan for the acquisition and refurbishment of their food truck. Under the Community Development Financial Institutions Fund, or CDFI, a program of the US Department of Treasury, certified lending institutions provide funds for individuals in low-income communities and provide instruction in economic empowerment.

You can take a similar approach with the US Small Business Administration (SBA). The SBA’s microloan program assists business owners with small financing amounts from $500 to $50,000 at low interest rates. Both the CDFI and the SBA advance money to financial lenders which then pass it on to the businesses in question. The SBA often serves traditionally underrepresented populations, such as women, minorities, and veterans.

Government organizations like these provide an invaluable service. Grossman explains:

Common Capital looked at us when a traditional bank would not have done so. Such funding has allowed for amazing leaps forward for a tiny business like ours, where every cent that we can invest is so beneficial and every bit of debt that we take on makes it harder to make the business into something that can support us.

DC Vegetarian (Portland, Ore.)

Originally from Portland, Ore., Becky Leonard returned in 2008 after living in the District of Columbia for seven years. She was surprised to find that the vegetarian craze hadn’t hit Portland’s booming food cart scene. “We lived close to downtown Portland, which is where the first food carts were popping up,” Leonard says. “At that time, there wasn’t an all-vegetarian one. Every cart had vegetarian options… but there wasn’t the kind of food that we were excited to seek out, so we saw an opportunity.”

Deep into a full-blown recession in winter 2009, Leonard and her then-boyfriend (now husband), Damien Gill, couldn’t find employment. Instead, they opted to make vegetarian comfort food their full-time enterprise, and opened DC Vegetarian.

Their venture became wildly successful, and was the only food cart to make Thrillist’s list of Portland’s Best Veg-Friendly Restaurants in 2016. Out of a tiny trailer open only at lunchtime, Leonard and Gill cranked out 150 sandwiches a day.

After nine years, the pair needed a change, and traded their mobile restaurant for a brick-and-mortar location in Southeast Portland. The sandwich shop has been open only a few months, but by all accounts, it’s a huge hit. Leonard and Gill sold their original trailer, but they kept it in the vegetarian community, giving another startup a discounted rate in exchange for promises that the all-vegetarian ethos will stay alive and well downtown.

Fund Your Food Truck with a Business Line of Credit

Leonard and Gill financed their enterprises on their own. But because they had a credit history and time in business established based on their previous experience, they could have also turned to a business line of credit as a funding option for their brick-and-mortar.

If you’re an established restaurant, although you might want to go the opposite way—brick-and-mortar to truck or cart—you can take a cue from this, too. Restaurateurs who want to branch out and have existing business credit history should consider this option. Remember, you don’t have to use a line of credit (or the full amount you’re approved for), but it’s an excellent tool to have at the ready.

Lots of Food Truck Choices, and Lots of Funding Options

Just like there’s no one best thing to serve from a food truck, there’s no one way to fund a mobile food operation, either. These four entrepreneurs all found solutions that worked to get their businesses going with a mix of traditional options and creativity. Hopefully, you can use both these traditional ideas and their clever approaches as a starting point if you decide you’re ready to take on an adventure of your own.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Elizabeth Kellogg

Contributing Writer at Fundera
Elizabeth is a marketing and communications consultant who specializes in expansion, strategy, and branding. With a background in ecommerce, tech, and lifestyle, she's written and managed digital media campaigns for websites and corporations including Glamour and Amazon.

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