Why trucking is its own funding category
Most small businesses get paid when they deliver. Trucking gets paid 30 to 60 days after they deliver, because freight brokers run on net-30 to net-45 payment terms. Meanwhile fuel, maintenance, insurance, and driver pay are due weekly or daily. The structural cash flow gap is the defining problem of trucking finance, and it shapes which funding products work.
The five products that fit trucking each solve a different piece of this puzzle:
Equipment Financing (the truck itself)
Lowest-cost funding for trucking because the truck is the collateral. 7-25% APR, 12-72 month terms, 10-30% down depending on truck age and FICO. Works for owner-operators with 540+ FICO. Full details.
Merchant Cash Advance
For fuel, repairs, insurance, payroll gaps. Underwrites on bank deposits (broker settlement deposits). $5K-$500K, factor 1.20-1.49, funded in 24-48 hours. Common for owner-operators bridging to factoring. Full MCA page.
Freight Factoring (referral)
Solves the 30-60 day broker payment gap. Sell invoices, get 90-97% within 24 hours, factor collects from broker. Costs 1-3% per 30 days outstanding. We refer to factoring partners; we do not broker factoring itself.
Business Line of Credit
Best for ongoing fuel and maintenance float on established carriers. Need 12+ months in business, 600+ FICO, $25K+ monthly revenue. 10-30% APR, revolving access. Line of credit page.
Business Term Loan
Buying out a partner, adding a second truck, building out maintenance facility. $10K-$500K, 9-30% APR, 1-5 year terms. Want 12+ months in business and 600+ FICO. Term loan page.
SBA 7(a) / 504
Fleet expansion, terminal real estate, acquisition of another carrier. $25K-$5M, 10-13% APR, 10-25 year terms. 24+ months operating history, 680+ FICO, full document package required. 30-90 days to close. SBA vs MCA comparison.
By scale: what funds best at each stage
Owner-Operator (1 truck)
Equipment financing for the truck (or already owned). Freight factoring to close the AR gap. MCA for fuel/repair emergencies. Skip SBA and most term loans; the documentation burden does not match the file size. Sweet spot: $5K-$75K working capital, $40K-$180K truck.
Small Fleet (2-10 trucks)
Equipment financing per truck as the fleet grows. Line of credit for ongoing operating float once the business hits 12+ months and 600+ FICO. Term loan for one-time expansion spends. Factoring still common but some carriers self-finance AR at this scale. Sweet spot: $50K-$250K working capital, fleet financing scales.
Mid Fleet (10-50 trucks)
SBA 7(a) becomes the cheapest expansion capital available. Bank line of credit at prime + 2-5% APR replaces alternative-lender LOC. Equipment financing through specialty trucking lenders (better rates than generic equipment finance). Factoring optional; many at this scale finance AR internally. Sweet spot: $250K-$2M.
What trucking underwriters specifically look at
Generic lenders sometimes get trucking files wrong because they read the bank statements and see "lumpy revenue" without understanding that lumpy is the nature of trucking AR. Specialty trucking lenders know the patterns. Things we make sure they see:
- MC/DOT authority age. 6+ months minimum, 12+ preferred. Lenders pull FMCSA records to verify.
- Operating authority. Common Carrier vs Contract Carrier vs Private. Most lenders fund Common Carriers; some restrict niche operating authorities.
- Insurance certificates. Active liability and cargo insurance with appropriate limits.
- Equipment count and condition. Year, make, model, mileage for every truck. Trucks under 10 years old preferred for equipment financing.
- Settlement deposit pattern. 4-12 deposits per month from various brokers signals diverse customer base. 1-2 deposits per month from one broker signals concentration risk.
- Out-of-service violations. CSA score and inspection history pulled from FMCSA. Above-threshold OOS rates can disqualify some lenders.
- Driver count and structure. Owner-operator driving = 1 driver. Small fleet with W-2 drivers = different risk profile. 1099 driver model is OK with most lenders.
Common use cases we fund
- Fuel and DEF emergency. Truck is parked, broker payment is 3 weeks out. $10-30K MCA for fuel + DEF + tolls. 24-hour funding.
- Major repair on the road. Engine, transmission, drive train. $5-25K MCA or repair-shop financing depending on amount.
- New truck purchase. First truck for an owner-operator or second/third truck for a small fleet. $40K-$180K equipment financing typically.
- Trailer purchase. Adding a reefer, flatbed, or step deck. $15-60K equipment financing, often 24-60 month term.
- Authority startup. Filing fees, insurance deposit, first month of operating costs. $25-75K term loan or MCA depending on credit.
- Fleet expansion. Going from 5 to 10 trucks. Mix of equipment financing per truck plus a working capital line for the operating ramp.
- Buying out a partner. $100K-$2M depending on size. SBA 7(a) is usually the right product if the business has 24+ months and clean financials.
The freight factoring conversation
Factoring solves the AR gap better than any other product if the math works. The trade is 3-5% of revenue for guaranteed 24-hour pay on broker invoices. For owner-operators making 20-30% gross margin, that 3-5% is meaningful but usually worth it because the cash flow consistency lets the operation scale.
We do not broker factoring itself (the relationship between the carrier and the factor is ongoing and operational, not a one-time funding event). We refer to factoring partners we trust, and we help carriers think through whether factoring or an MCA + LOC combination fits their numbers better.