The Hidden Cost Behind LA’s Fruit Carts: Immigrant Vendors, High-Risk Financing, and the Role of Kareem Carts

In cities like Los Angeles, mobile fruit carts have become a familiar and beloved part of the urban landscape. Ubiquitous in neighborhoods such as Boyle Heights, South LA, and MacArthur Park, these carts, often stocked with freshly cut mango, pineapple, cucumber, and watermelon, are a symbol of entrepreneurial spirit, cultural identity, and community accessibility.

Most of these carts originate from Kareem Carts Commissary & Manufacturing Co., a long-standing LA-based manufacturer that has become a central player in the mobile food vending economy. While the company provides legitimate, well-built equipment, concerns are emerging over the financial mechanisms used by many street vendors to acquire these carts, mechanisms that disproportionately impact low-income, immigrant entrepreneurs.

 

 

Financing “Support” Without Transparency

Kareem Carts does not provide in-house financing. Instead, it refers customers to third-party lenders, including entities like Accion Opportunity Fund (AOF), Ritchie Bros. Financial Services, and STEER FINANCIAL, often associated with Stratus Financial. While this approach allows Kareem to focus on manufacturing and avoid the regulatory complexities of direct lending, it has created a gap in oversight and accountability, one that leaves financially vulnerable buyers exposed.

The only lender among these with clearly disclosed and sub-30% APR financing is Accion Opportunity Fund, a nonprofit lender that specializes in providing loans to underserved small businesses. Their interest rates range from 8.49% to 28.99%, with reasonable terms and transparent disclosures.

In contrast, both STEER/Stratus Financial and Ritchie Bros. do not publish clear APR ranges for their equipment financing. Publicly available consumer reports, including complaints filed with the Better Business Bureau and user testimonials on forums like Reddit, suggest that Stratus Financial has offered loans with total effective APRs well above 30%, due primarily to large and often poorly disclosed processing and finance charges.

In one case, a borrower described being charged $13,000 in fees on a $14,000 loan. Another user reported a $50,000 fee on a $10,000 disbursement. Though Stratus Financial’s official marketing language emphasizes “transparent terms” and “flexible repayment,” these reports suggest a systemic lack of informed consent, especially when the borrowers are non-native English speakers or have limited financial literacy.

"If these fees were disclosed in advance in plain language, many borrowers would likely reconsider," says a community development finance expert based in Southern California. "But too often, they’re not."

Why Immigrants Are Disproportionately Affected

The typical Kareem Carts customer is an aspiring street vendor, often an immigrant, frequently without a credit history or access to conventional loans. For many, street vending is not just a business opportunity but a path toward survival in the face of systemic exclusion from formal employment and financial systems.

That makes them particularly susceptible to predatory or high-risk financing.

When an individual without a financial safety net is presented with “easy monthly payments” and “no credit required,” they may accept terms that ultimately undermine their long-term financial security not because they are reckless, but because the alternative is having no business at all.

In this context, Kareem’s decision to refer customers to lenders with opaque terms has real consequences. The company is not directly responsible for the loan terms, but its role as a gatekeeper creates a perception of trust and endorsement. That trust is crucial and when it leads borrowers into exploitative loans, it becomes a form of systemic harm.

The Regulatory Blind Spot

Equipment financing for small vendors exists in a regulatory gray zone. While many consumer protections exist for residential mortgages or payday loans, there is less oversight of small business equipment financing, especially when fees are structured in nontraditional ways.

Some states, like California, have made moves to increase transparency in commercial lending. But enforcement is uneven, and borrowers who speak little English or are unfamiliar with U.S. contract law often do not understand their rights,let alone exercise them.

“The issue is not just interest rates,” says a legal aid attorney who works with low-income entrepreneurs. “It’s total loan cost, hidden fees, and the mismatch between what the vendor thinks they’re agreeing to and what they’re actually signing.”

Policy and Community Implications

As Los Angeles continues to expand its support for legalized street vending, city officials and economic justice advocates should consider not only the regulatory frameworks around permits and inspections, but also the financial health of the vendors themselves.

Ensuring that vendors can access fair financing is critical. Micro-lenders like Accion Opportunity Fund are a step in the right direction, but they are not the default option many vendors encounter. Clear guardrails on who companies like Kareem Carts can recommend, or at least what they must disclose about those recommendations, would empower vendors to make better-informed decisions.

Additionally, community education efforts on financial literacy, especially in Spanish and other commonly spoken languages, could provide vendors with tools to ask the right questions and avoid exploitative loans.

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Conclusion: A Cart Is Not Just a Cart

Behind every fruit cart in Los Angeles is a story, not just of hustle and ambition, but often of risk, debt, and limited options. While Kareem Carts plays an important role in the city’s food economy, its partnerships with opaque lenders have introduced unnecessary financial harm into an already vulnerable ecosystem.

By bringing more transparency and oversight into the financing side of mobile vending, policymakers, community leaders, and businesses can help ensure that these carts remain what they appear to be on the surface: a symbol of opportunity, not exploitation.