Why does growth make the payment gap worse?
Every new truck adds weekly costs right away, but the revenue from its first loads does not arrive until the shipper’s terms run out. Add three trucks on net-45 freight and you can carry six weeks of extra fuel and payroll before the first check lands.
The gap compounds because receivables keep stacking: by the time the first invoice is paid, the trucks have hauled five or six more loads that are also waiting. A fleet doubling in size can have twice the cash tied up in unpaid invoices, even though it is more profitable on paper.
Map it out with a simple calendar. Mark the date each load delivers, the date the invoice goes out and the date payment is due. The space between the first fuel purchase and the first payment is the amount you need to bridge.
What are the usual ways to bridge it?
Factoring sells the invoices for an advance minus a fee; a line of credit lets you draw and repay as invoices clear; and working capital provides a lump sum repaid from deposits over a few months. Many fleets combine them, factoring slow brokers while funding the ramp-up with working capital.
Factoring ties cost to each invoice and often involves notifying the shipper. Working capital does not touch your invoices or customer relationships, but it has a fixed total cost and payment. The right mix depends on how many customers you have, how reliable they are and how long the growth phase lasts.
How do I shorten the gap once it exists?
Invoice the day the load delivers, with every document the customer requires attached, and follow up a week before the due date. Many payment delays are paperwork delays.
Missing PODs, wrong reference numbers and unsigned rate confirmations push invoices to the back of an accounts payable queue. A simple checklist for every invoice fixes most of it. Some shippers also offer early-payment discounts; compare that small discount with what you pay to bridge the gap. Over time, choosing customers who pay on schedule is the cheapest working capital strategy there is.
| Option | How it is repaid | Shipper involved? |
|---|---|---|
| Freight factoring | Shipper pays the factor | Usually yes (notice of assignment) |
| Line of credit | Draw and repay as invoices clear | No |
| Working capital | Fixed payments from deposits | No |
| Broker quick pay | Broker deducts a fee | Broker only |
Worked example: four trucks moving to a net-45 shipper
A four-truck fleet averaging $96,000 in monthly deposits signs a direct shipper on net-45 terms and needs about six weeks of fuel and driver pay, roughly $40,000, to carry the transition. Using an illustrative factor rate of 1.24, $40,000 would mean $49,600 repaid over roughly 8 months: 35 weekly payments of about $1,417.
That works out to about $6,200 a month, or 6.5% of the $96,000 this business deposits monthly, and the total cost of the money is $9,600. Once the shipper’s payments start arriving on schedule, the gap closes and the fleet keeps the higher direct-shipper rate without giving up a factoring percentage on every load.
For comparison, repaying the same $49,600 over 6 months would lift the monthly outlay to about $8,267, or 8.6% of deposits, so ask for both terms in writing; the shorter one frequently prices lower even though each payment is larger.
| Average monthly deposits | $96,000 |
|---|---|
| Amount funded | $40,000 |
| Factor rate (illustrative) | 1.24 |
| Total repaid | $49,600 |
| Cost of the funding | $9,600 |
| Term | about 8 months |
| Weekly payment (35 payments) | $1,417 |
| Payments as a share of deposits | 6.5% |
Who receivables-gap funding fits
Usually a fit
- Fleets moving from brokers to direct shippers
- Carriers adding trucks to a new contract
- Operators who want to avoid factoring a good customer
When growth funding can wait
- Fleets whose shippers already pay within a week
- Carriers with chronic late payers they should drop
- Businesses with no deposit history
What you’ll typically need
- Recent business bank statements
- Accounts receivable aging report
- Shipper contracts or rate agreements
- Business and owner details
Frequently asked questions
Is working capital cheaper than factoring?
It depends on volume and term. Factoring charges per invoice; working capital has one fixed cost. Compare the total over the same period.
Can I use both factoring and working capital?
Sometimes, but factored invoices are pledged to the factor. Disclose any factoring agreement when you apply.
How much should I request?
Many fleets size it to the weeks of fuel and payroll between first load and first payment.
Can lower credit still get a net-45 payment gap covered?
Often, yes. A fleet owner with a score from 500 can apply for a net-45 payment gap, and as credit improves the offers generally get better.
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Updated October 6, 2026