Financing for transportation and logistics
Carriers and logistics firms run on trucks, fuel and receivables that pay in 30 to 90 days.
Key points
- Carriers often wait 30 to 90 days to get paid by shippers and brokers.
- Fuel, insurance and drivers have to be paid every week.
- Factoring is one of the most common ways trucking companies manage cash flow.
- Trucks and trailers are strong collateral for equipment financing.
How financing works in transportation and logistics
Trucking and logistics run on thin margins and long payment terms. Every load costs fuel, driver wages, insurance and maintenance up front, but shippers and freight brokers often pay 30, 60 or even 90 days later. A growing carrier can run out of cash precisely because it’s winning more work.
Most transportation financing does one of two things: turns your receivables into cash sooner, or spreads the cost of trucks and trailers over their working life.
Common financing needs
Here’s how businesses in this industry typically match their needs to the right kind of financing.
| What you need | Usually the best fit | Why |
|---|---|---|
| Get paid on loads without waiting 60 days | Invoice factoring | Advances most of each invoice within a day or two, based on your customers’ credit |
| Add or replace trucks and trailers | Equipment financing | Matches payments to the life of the equipment, with the unit as security |
| Cover fuel and repairs between payments | Lines of credit | A flexible buffer for costs that don’t wait |
| Buy another carrier or a terminal | Business acquisition | Grow through acquisition, financed on the combined cash flow |
How NorthMerit can help
Apply once and we’ll connect you with one financing partner who works with businesses like yours. It’s free, and there’s no obligation.
What lenders look at
Lenders look at who your customers are and how reliably they pay, the age and condition of your fleet, your safety record and your insurance history. For factoring, the strength of your shippers and brokers matters more than your own credit, which helps newer carriers.
They’ll also look at your revenue per truck and how concentrated your business is. Relying on one or two customers is a risk lenders will ask about.
Other things partners commonly ask about: long shipper payment terms; fleet replacement cycles; fuel and maintenance costs.
Factoring a week of loads
A carrier invoices $40,000 in a week to brokers on 45-day terms. The factor advances 90% within a day and charges a 2.5% fee.
How to prepare
Gather your operating authority and safety records, your insurance details, an aged receivables report and a list of your units with their year and mileage. If you’re factoring, a list of your main shippers and brokers helps the partner set terms quickly.
Common questions
Is NorthMerit a lender?
Does it cost anything to apply?
Who will contact me?
The right financing, from the right partner.
Apply once. One financing partner who knows businesses like yours. Free, with no obligation.
