How to Start a Food Truck Business and Secure Financing for It

In the restaurant industry, the food truck concept has been booming lately due to its ability to access a variety of locations. Starting a food truck business is also cheaper than running a stationary restaurant. So, if you are passionate about food and want to start a business around it, a food truck can be a great option. 

Even though it has low start-up costs, you need to buy things like a truck, cooking equipment, and serving equipment. You will also need funds for marketing and buying daily essentials. You can easily take a business loan for a food truck to cover all these costs. This business has a high potential for profitability, so you can repay the loan easily in no time.

The crucial aspects of starting a food truck business are choosing the locations, finalising the menu, and ensuring customer satisfaction. Planning accordingly will help you build a successful venture. Here’s a step-by-step guide on how to open a food truck: 

1. Create a Business Plan

A well-thought-out plan is key to making your food truck business successful. Your plan should cover:

• Identifying the target customer for your food truck

• Expenses according to the audience

• How much money you expect to earn, and your potential profits

• Your marketing strategy

• A look at your competitors locally and online

2. Research your Competitors

Check the other food truck businesses in your city or vicinity and taste their food. Try to understand the target audience and how they attract crowds. Delve into aspects like ambience, hygiene, and marketing strategies being employed. 

You can also check their reviews by food bloggers on different social sites and understand which ones are gaining popularity and why. 

3. Pinpoint your Target Audience

Knowing your audience will give you the best chance for success. Different kinds of customers have different kinds of preferences. Here are some pointers to give you an idea:

• College students may like quick snacks before or after college hours

• Office goers may prefer breakfast and lunch along with snacks, tea and coffee 

• Party-goers may prefer night-time snacks

• Tourists may be attracted by local cuisines 

Your menu, theme, and location will depend on your target customers. 

4. Decide on the Menu

Research and create a unique menu that fills a gap in the market and attracts your target audience. Here are some ideas to consider: 

• Go niche by focusing on one type of offering, such as burgers, dumplings, or yoghurt-based desserts

• Offer a menu that focuses on a specific cuisine, such as Korean or Thai food 

• Open a drink-based truck that offers everything from juices and smoothies to milkshakes and floats 

Before you select your menu, here are a few things to keep in mind:

• The food should be unique, simple, and affordable

• It should be easy to prepare in your truck’s kitchen setting

• The ingredients should be fresh and easy for you to source 

• The taste should be memorable 

• Your food and around the stall area should be clean and hygienic

5. Choose a Location

The best fact about a food truck is you don’t have to rely on one location. If a location is not giving you enough profit, you can always go somewhere else. Here are some pointers that can help:

• Offer the service during work hours if you are planning to open it near an office area 

• If you plan to go near places where people go for morning walks or jogs, find out the timings and keep your truck open in the morning and evening hours 

• For students, keep your truck operational during recess and closing times

6. Hire Staff

Plan if you need any help with offering your services. It is best to hire one employee for taking orders and another for cooking. 

7. Get Legal Permits

To legally operate your food truck, you need to get some licences and registrations. Some of these are:

• Food licence

• NOC from the fire department

• Commercial Vehicle licence 

• Licence from the local municipal corporation 

8. Buy the Equipment 

After securing the truck and finalising its design, the next step is to acquire the necessary kitchen equipment. This includes grills, pots, and pans, which are essential for meal preparation. Additionally, invest in cutlery, a stove, and various utensils required for both cooking and serving.

To run a food truck legally in India, you will need to get a few licences and registrations. Here are the essential ones: 

FSSAI Licence

Register with the Food Safety and Standards Authority of India (FSSAI) based on your turnover and manufacturing capacity. The documents you need to apply for the licence are:

• Photo ID proof

• Premises proof (rent agreement/electricity bill/property papers)

• Kitchen layout plan

• List of prepared food items

• NOC from Municipality/Panchayat

• Signed Declaration Form (Form B)

• Food safety management plan

• Water test report

• List of kitchen equipment

• Authority letter for responsible person

You can display the licence in the food truck to gain the trust of the customers. 

GST Registration

If your food truck business is covered under the GST law in India, you need to register for GST. To apply for the licence, you need the following documents:

• PAN card

• Aadhaar card

• Bank account statement/cancelled cheque

• Digital signature

NOC Certificate

Get a No Objection Certificate (NOC) from your local authority, like from the fire department. You may need to submit more documents based on the type of food truck and the location.

Launching a food truck in India can be a cost-effective alternative to a full‑fledged restaurant. With urban demand and street‑food culture on the rise, your initial investment will depend on city tier, choice of truck (new, used or rented), equipment quality, licences, and branding.

Tier Classification and Cost Factors

Tier 1 Cities (e.g., Mumbai, Delhi, Bengaluru): 

• Vehicle cost: Higher prices for new trucks or custom conversions.

• Equipment & kitchen fit-out: Premium, hygienic fixtures and appliances at a cost.

• Licences & permits: Municipal, FSSAI, RTO, fire‑safety and trade licences may be costlier.

• Branding & wrapper design: Investment in professional signage and truck wrapping for visibility. 

Tier 2 & Tier 3 Cities (e.g., Jaipur, Kochi, Patna): 

• Vehicle cost: Lower prices for used trucks or simpler conversions.

• Equipment quality: Standard kitchen equipment sufficient for basic street‑food.

• Licences & permits: Generally lower municipal fees; possibly simpler permit processes.

• Branding: More modest signage and DIY wraps may suffice. 

Estimated Total Setup Costs

Summary

• Tier 1 Cities: Require higher capital owing to newer vehicles, premium equipment, and formalisation. 

• Tier 2 Cities: Present a balanced investment opportunity with moderate quality and reasonable compliance costs. 

• Tier 3 Cities: Offer lowest initial investment; ideal for cost-conscious entrepreneurs aiming for community markets. 

Disclaimer: These cost figures are indicative and meant for illustrative purposes only and do not guarantee actual expenditure patterns. Actual investment needs may vary significantly depending on location, brand tier, inventory size, and infrastructure. Always consider consulting with related experts for more precise budgeting.

The food truck business is currently in trend, and to stay ahead of others, you may need to create a unique selling point. A food truck loan can help you distinguish yourself from others.  

Uses of a Business Loan for a Food Truck

Understanding your budget in advance will provide you with a clear idea of where to allocate your funds. Key expenses typically include:

• Renting or Buying the Truck: This is one of your most significant expenses. If you choose to rent a food truck, you will have to make monthly payments. If you decide to buy, you will need substantial capital upfront. In either case, remember to allocate funds for designing the truck to create an appealing aesthetic that attracts customers.

• Purchasing Equipment: The equipment you require will depend on your menu. For instance, a bakery food truck will need a large oven to bake multiple items at once, while a juice truck will require high-quality juicers. The type of food you offer will help you decide the equipment and overall costs.

• Buying Raw Ingredients: You will need to purchase ingredients multiple times a month, and prices will vary. While it may be tempting to opt for cheaper options, it is essential to prioritise quality. The quality of your food will play a major role in attracting and retaining customers, especially since they are more aware and selective nowadays.

• Marketing and Promotions: As a new food truck business, you will need to promote your brand both online and offline. Marketing expenses may include:

• Development of the brand website

• Social media advertisements

• Local promotions through banners and signage

Benefits of a Business Loan

Business loans offer a variety of features and benefits. Here are some of them:

• Funds When You Need It: You can access funds within minutes with minimal documentation as long as you meet the lender's eligibility criteria.

• Substantial Loan Amounts: Depending on your financial profile, you can get high loan amounts. Lenders on Bajaj Markets offer loan amounts of up to ₹50 Lakhs, allowing you to start and run your business with ease.

• Easy Repayment Options: Many lenders offer long repayment tenures to allow you to repay comfortably. Choose a repayment schedule that fits your financial situation. 

• Potential Impact on Credit Score: Upon managing the loan responsibly, you will improve your creditworthiness. Maintaining good credit behaviour is helpful as you will be able to get loans with even better terms in the future.

On Bajaj Markets, you can apply for a business loan digitally and secure capital to start your business. Here is the list of lenders you can compare and choose the right option:

Disclaimer: The mentioned rates are subject to change at the lender’s discretion.

These are the basic criteria to apply for a loan to open a food truck via Bajaj Markets:

• Age: Between 21 and 60 years

• Citizenship: Indian with a good CIBIL score

• Employment: Self-employed professionals or non-professionals

• Business Categories: Includes partnerships, limited liability partnerships, and private limited enterprises

• Business Vintage: At least 1 year

• Annual Turnover: The business' minimum annual turnover should be ₹1.5 Lakhs, as per the Income Tax Return (ITR)

Additionally, you need to submit the following documents for verification:

• Identity Proof: PAN card, Aadhaar card, Passport, Driving Licence, or Voter ID

• Address Proof: Aadhaar card, Passport, Utility Bill, or Rent Agreement

• Income Proof: Bank statement (last 6 months), ITR, income documents, and a 2-year profit & loss statement with a balance sheet

• Business Proof: Sole Proprietorship Declaration, Partnership Deed, or Company Registration Documents

Securing a business loan for your food truck venture depends significantly on your personal credit score and your company’s commercial credit profile. Lenders usually evaluate both to assess your financial reliability and repayment discipline.

A personal credit score signals responsible borrowing, creditworthiness, and financial expertise. Ideally, you should aim for a CIBIL score of 750 or above. Scores between 700-750 may still be considered, but they may come with more scrutiny or higher interest rates. Regular monitoring and timely payments help maintain this score.

Equally important is your Company Credit Report (CCR) and CIBIL Rank. This reflects your business’s credit history, debt repayments, and usage patterns, providing a rank between 1 to 10. A solid CCR reassures lenders of your business’s financial stability and supports smoother loan approval.

Together, a healthy personal score and a dependable CCR strengthen your loan application and help negotiate better terms for your food truck.

With just a few steps, you can acquire a high-value working capital loan and start your business:

• Click on the ‘Check Loan Eligibility’ button at the top of the page

• Fill out the application form with your personal and income information

• Click on ‘Check Your Offer’ to move forward and continue your application

• Choose your preferred loan amount and a repayment tenure that you are comfortable with

• Upload the required documents, like address proof, ID proof, business proof, etc. for verification

India offers a range of government schemes to support entrepreneurship and MSME growth. These programmes provide funding, credit guarantees, subsidies, and training to help entrepreneurs start and scale ventures like food trucks or other small enterprises. 

Central Government Schemes