Van Finance for Mobile Caterers

Finance for mobile caterers is commercial vehicle funding arranged for street food, event catering and coffee businesses. What makes it different from a standard van purchase is that the conversion, meaning the kitchen, extraction, gas, power and serving equipment, is usually worth more than the base vehicle, so the finance depends on a lender who will value the finished vehicle rather than looking up the van in a price guide.

Every trade on this site has a version of the same problem. A tipper body, a Luton with a tail lift, a water tank system. In mobile catering it reaches its extreme.

A ten year old panel van might be worth a few thousand pounds. Put thirty or forty thousand pounds of stainless steel, extraction, gas, refrigeration and serving equipment into it and you have an asset worth many times the vehicle it started as, none of which appears in any price guide.

Getting that funded properly is most of what this page is about.

Looking for a different trade? See our van finance by trade guides.

When the kitchen is worth more than the van

A lender assessing a finance application looks at the vehicle, because the vehicle is the security. Run a converted catering van through a standard valuation and the answer that comes back reflects a used panel van, not a working commercial kitchen.

The result is familiar to anyone who has tried to fund one. The invoice says one number, the lender offers considerably less, and the buyer is asked for a deposit to bridge a gap that only exists because nobody has explained what is actually being bought.

We handle it by putting the case properly. Who built the conversion, what went into it, what the equipment is and what it is worth. Where the work has been carried out professionally by a recognised converter, we work with lenders who will fund the completed vehicle rather than the chassis.

If you are buying a converted vehicle, send us the specification and the build details along with the invoice, and tell us who did the work. If you are buying a van and having it converted, tell us both halves of the plan at the outset, because it is far easier to structure that as one piece of business than to come back for the conversion afterwards.

Age, and the classic van question

There is a tension in this trade worth being straight about.

Some of the most successful mobile catering businesses run distinctly old vehicles. Classic conversions, vintage vans and horseboxes photograph beautifully, stand out at events and are a genuine part of the brand. They are also, from a lender's point of view, old vehicles.

Age narrows the options. The general rule across commercial finance is that the asset needs to have enough working life and enough value left in it to secure the agreement, and a vehicle from another era makes that harder. It does not make it impossible, particularly where the vehicle has been professionally restored and converted and is genuinely worth what is being paid for it, but the lending panel is smaller and the case has to be made carefully.

The honest answer is that it depends on the specific vehicle. Tell us what you are looking at before you commit to it, and we will give you a straight answer rather than letting you find out after you have paid a deposit.

Trailers, and the cheaper route in

Not every mobile catering business starts with a converted van, and there is no reason it should.

A catering trailer pulled by a vehicle you already own is often the more sensible way to begin, and trailers can be financed in their own right. It keeps the initial commitment lower, and if the business grows into a van conversion later, the trailer usually holds its value well enough to sell on.

Where you need both, the tow vehicle and the trailer can often be arranged together. Tell us what the plan is and we will structure it whichever way works out better.

Getting ready for the season

Event and festival catering is concentrated into the warmer months, and street food markets, offices and private hire fill in the rest of the year. For most mobile catering businesses that means the income is heavily weighted towards spring and summer.

Two consequences follow. The first is timing: a vehicle or a conversion ordered in the depths of winter is ready for the season, whereas one arranged in May is already missing bookings. Conversions in particular take time to build, so the lead time is worth planning around.

The second is how the year reads on paper. Lenders experienced in seasonal businesses understand a quiet January. Mention the shape of your year when you enquire so we approach the right ones first, and if you have bookings or pitch agreements confirmed for the season ahead, those are worth sending too.

What mobile catering businesses finance with us

New or used, converted or awaiting conversion.

What we can arrange that a dealer cannot

Dealer finance is convenient and sometimes the rate is genuinely competitive. What it rarely includes is any of the following.

Funding for the finished vehicle

This is the whole point. A dealer's finance desk works to the guide price of the van. We put the conversion, the equipment and the build to the lender so the vehicle is funded for what it actually is.

The van and the conversion together

Where you are buying a vehicle and having it built afterwards, we can often structure both rather than leaving you to pay for the conversion out of working capital at the point you can least afford it.

VAT deferral

On qualifying agreements the lender pays the supplier the full price including the VAT, then collects the VAT element from your business as a single payment after an agreed period, usually around three months. That gives you time to reclaim it from HMRC first, and there is no charge for the facility.

Little or no deposit

Dealers commonly ask for 10 to 20 per cent down. For a VAT-registered limited company with a reasonable credit profile buying at a sensible price, no deposit at all is a normal outcome with us.

Specialist business finance advice

A dealer's finance desk sells a finance product. Buying through the business changes the position considerably: a VAT-registered business reclaims the VAT, and under hire purchase the vehicle is treated as plant and machinery, so the cost can be written off against taxable profits through capital allowances with the interest element deductible separately. We are a broker rather than accountants, so your accountant has the final word, but we will structure the agreement to suit how the business is set up.

Starting a mobile catering business

More of the applications we see in this trade are from new businesses than in almost any other, and that is entirely normal. Street food is a common first business, often started by people leaving a kitchen job to work for themselves.

New limited companies and businesses under two years old can apply. Without a trading record, lenders lean on the director's personal credit history, and a deposit is usually required. What genuinely helps is evidence that the business is real rather than an idea: confirmed pitches, event bookings, a market licence, or a track record working in catering.

A few things to have in place before you trade, none of which affect the finance but all of which the business needs. Food business registration with your local authority, which should be done at least 28 days before you start. A gas safety certificate covering the LPG appliances, issued by an engineer registered for commercial catering work. And a street trading licence or pitch agreement wherever you intend to operate.

For more on what lenders look for with newly formed businesses, see our new business van finance page.

Finance with a difficult credit history

A poor credit history does not prevent a catering business from financing a vehicle. We work with specialist lenders who assess the whole picture rather than an automated score, and strong recent trading often counts for more than something that happened three years ago.

A deposit and a well specified vehicle both widen the options. See our bad credit van finance page for more detail.

Who can apply

Limited companies can borrow from £10,000. Sole traders can borrow from £25,000, on unregulated credit agreements, because the lenders we work with offer commercial finance only. Given what a professional conversion costs, most applications in this trade sit comfortably above both figures.

Established operators, newly formed companies and first-time traders are all welcome to apply.