Financing a food truck in Auburn, AL for a business that already runs one starts with the older truck: its trade credit, any balance still owed on it, then the newer truck and its kitchen items as equipment. This article follows one invented food truck business through each step, with a trade-in, a payment table and a payoff worked two ways.
A food truck business replacing its truck can put the older truck’s trade credit toward the price, finance the newer truck and its kitchen as equipment, keep later kitchen replacements on a shorter agreement, and either net a remaining payoff from the trade credit or pay it from cash. Every price below is made up for illustration.
Financing food trucks with a trade-in: an older truck toward a newer one
Illustration only, invented figures: an Auburn, AL food truck business that has run one truck for several years finds a newer used truck with a finished kitchen for $71,800 and trades in its older truck for a $9,400 credit. The invented amount to finance falls to $62,400.
Through equipment financing at a 10.7% annual rate for 60 months, that invented balance means $1,347.41 a month, $80,844.60 over five years and $18,444.60 of interest. The newer truck itself secures the agreement.
One way to read that payment is by event. If the invented truck books 9 events a month, each one carries $149.71 of the truck payment before food, staff or paper goods. An operator that prefers a fixed schedule across several purchases can also ask about a term loan; a funding partner decides which structure it offers.
Food truck financing for the kitchen inside an Auburn, AL truck: a sandwich rail, a convection oven and an inverter generator
Illustration only, invented figures: a year later the same truck needs a refrigerated sandwich rail at $4,185, a countertop convection oven at $3,260 and a quieter inverter generator at $5,940, $13,385 in all.
Kept off the truck’s own agreement, those invented items fit a separate 30-month equipment agreement at 11.9%, and the invented payment is $518.01 a month with $2,155.30 of interest, finished well before the truck’s 60 payments. Keeping them apart means the truck balance is not stretched to carry items with a different working life, and each piece of equipment secures its own agreement.
A food truck loan beside the operator’s other monthly payments
Illustration only, invented figures: a funding partner may look at how a new payment sits next to the agreements a business already carries. For the invented operator, the month after the kitchen items arrive looks like this:
| Agreement | Monthly payment |
|---|---|
| Commissary prep table and shelving (existing) | $341.60 |
| Chest freezer at the commissary (existing) | $196.30 |
| Food truck, 60 months | $1,347.41 |
| Truck kitchen items, 30 months | $518.01 |
| All four | $2,403.32 |
In this invented table the truck adds more than either kitchen agreement, and all four together come to $2,403.32 a month. A funding partner may set that monthly sum beside recent bank statements before it decides on the newer truck.
When the older truck still has a balance: the payoff netted or paid from cash
Illustration only, invented figures: the older truck still has $3,150 owed on its own loan on the day of the trade. The payoff can come out of the $9,400 trade credit or out of the operator’s cash, and the two routes price out like this:
| Route | Amount financed | Monthly payment | Interest over 60 months |
|---|---|---|---|
| Payoff netted from the trade credit | $65,550 | $1,415.43 | $19,375.80 |
| Payoff paid from cash | $62,400 | $1,347.41 | $18,444.60 |
Netting the payoff lifts the invented payment by $68.02 a month and adds $931.20 of interest over the 60 payments; paying it from cash keeps the smaller balance but takes $3,150 out of the account on the day of the trade. A dealer taking the older truck may ask for a payoff letter from the lender that holds its title.
Costs that are not equipment, such as wages for a second cook on a longer menu, sit apart from the truck on a working capital loan. Lee County, AL restaurants with paid employees split into 178 limited-service and 132 full-service establishments in the 2023 County Business Patterns. By business address, ZIP Code Business Patterns placed 61 full-service restaurants in ZIP 36830 that year. More on restaurant equipment and payroll is on the restaurants page.
By Hazelbridge Financial · Updated
