Business finance for transport & logistics

Paying weekly, invoiced monthly

Transport and logistics has one of the sharpest cash-flow mismatches of any sector. The big costs — fuel, driver wages and vehicle running costs — fall weekly, sometimes daily. But the revenue arrives on customer terms of 30, 60 or even 90 days. You fund every load up front and wait a month or more to be paid for it.

That mismatch never goes away; it scales with the business. Win a bigger contract and you immediately need more diesel in the tanks and more drivers on the road, all paid before the first invoice on that contract clears. Growth tightens cash rather than easing it.

Pressures specific to transport & logistics

Several cost pressures are unique to running vehicles for a living:

• Fuel price swings. Diesel is your largest variable cost and it moves with the market, so a contract priced last quarter can be run at a higher cost today.
• Driver wages and shortages. Pay, agency cover and recruitment all land weekly, before the jobs they cover are invoiced.
• Maintenance, MOTs and the unexpected. A breakdown or a failed inspection takes a vehicle off the road and triggers an immediate repair bill.
• Compliance and standing costs. Operator licensing, insurance, tachograph and telematics, and tyres are non-negotiable overheads.
• Fleet replacement. Vehicles age out, and depots and gateways need cash to keep the fleet roadworthy.

Typical uses of short-term funding

Hauliers, couriers and logistics operators commonly use a facility to:

• Cover fuel and wages while invoices on 30–90 day terms are outstanding.
• Take on a larger contract that needs more vehicles and drivers running before it pays.
• Fund an urgent repair, MOT failure or breakdown to get a vehicle earning again.
• Bridge a seasonal peak — peak retail, agricultural or events seasons — when volumes and costs spike together.
• Smooth cash through the gap created by a single slow-paying customer.

Buying vehicles outright is usually a job for asset or hire-purchase finance over a longer term; short-term working capital is about keeping wheels turning between invoices.

Finance lent to the company, not the operator

Credicorp business finance is short-term working capital for your limited company, with no personal guarantee. For an operator whose name is already on the licence and the lease, keeping the company's funding free of personal exposure is a real advantage — the obligation sits with the business.

Because fuel and wages recur every week, a revolving line often fits better than a one-off loan. Credicorp Flex lets you draw to cover the weekly outgoings and repay as customer payments land. Credicorp is an exempt business lender to UK companies.

What to weigh before you borrow

Short-term finance fixes a timing gap; it won't rescue an underpriced contract. Before borrowing:

• Know your cost per mile. If fuel and wages have risen since you priced a job, the cash needed to run it has risen too — borrow against today's costs.
• Tie borrowing to receivables. If a customer pays in 60 days, a facility bridging roughly that window is sound; a permanent shortfall is a pricing issue, not a funding one.
• Watch customer concentration. If one or two large clients dominate your revenue, a single late payment can stall the fleet — size your facility for that risk.

This page is general information, not financial advice. Model a facility against a real contract or invoice run.