In this the third installment of our series Anthony Salvagno of S’wich It Up shares the mix of funding sources he’s leveraged to acquire capital for his food truck. Salvagno, like most beginning owners has secured financing from multiple sources, including personal savings, winnings from a business plan competition, crowd funding through FoodStart.com, family contributions, and a loan.
In this discussion, Salvagno explains some of the challenges associated with getting a traditional loan for a new food truck. Like any new business it’s untested idea at this point and has no history of revenue generation so getting a traditional business loan from a bank will not be an option for most entrepreneurs. Fortunately, Salvagno references some organizations that may lend to you in the New Mexico (where Salvagno’s Business is located): Wesst and The Loan Fund (where Salvagno got his loan). The maximum amount of money that Salvagno could acquire was $25,000, although everyone’s situation will be different.
Most places in the United States have similar non-profit organizations that will loan money to local entrepreneurs in an effort to develop small businesses and improve the local economy. You will need to conduct a bit of research on your end to identify the names of these organizations near you. With that being said, if you live near a suburban location similar institutions likely exist.
Want to Raise Money Through Crowdfunding? Click Here to Learn the Exact 12-Week Process Anthony Salvagno Used to Launch His Campaign.
Here is the break down of how much Salvagno is planning to pay for a new food truck at this point:
Anticipated Cost of Food Truck (not including licensing and other fees): $40,000
Anticipated Funding Sources:
Personal Savings / Family Contributions / Business Plan Winning’s: $20,000
Crowdfunding Campaign: $5,000
Business Loan: $25,000
Last Ditch Option: In case additional funding is needed, Salvagno’s mother has also offered to put up $5,000 in additional capital to get the business off the ground. This is a last resort, however.
Crowdfunding is like a whole different beast when it comes to raising money. You’re like marketing your business fulltime. It’s an 8 hours a day job you’re trying to do everything you can to raise awareness. – Anthony Salvagno on using crowd funding to help start a business.
What You’ll Learn
- How a real food truck has successfully acquired funding
- What Salvagno would do differently with his next crowd funding campaign.
- Some of the misconceptions of crowd funding: Primarily people think that they are giving your “free” money with no value exchange.
- How to find organizations in your area that offer small business loans
- Why supportive friends and family members can be an important way to help start a business
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