Industries
Transport and logistics
Logistics operators fund fleets, terminals and the working-capital gap created by customer payment terms. Fleet finance is straightforward; infrastructure requires longer tenor and contracted volumes.
Transport and logistics
- Fleet and trailer asset finance
- Terminal and warehouse funding
- Working capital against contracted volumes
- Common structures
- Hire purchase, finance lease, sale and leaseback, receivables finance
- Typical facility size
- £100,000 – £15 million
- Indicative pricing
- Base rate plus 2–6 per cent, asset-dependent
- Security
- Vehicle or asset charge; debenture over receivables where applicable
- Time to funding
- 2–6 weeks for standard fleet finance; longer for infrastructure
A capital-intensive sector with thin margins
Transport and logistics operators run on tight net margins while carrying a heavy capital base: tractor units, trailers, containers, handling equipment and, for some operators, warehousing or terminal infrastructure. Cash is absorbed by fuel, driver payroll and maintenance well before customer invoices settle, often on 60- to 90-day terms with large shippers or retailers.
That combination of thin margin and long payment terms means working capital and fleet renewal compete for the same cash. Operators who fund fleet purchases from operating cash flow frequently find they have starved the business of the buffer needed to absorb a slow-paying customer or a fuel price spike.
Structures that fit the trading pattern
Fleet and trailer finance, structured as hire purchase or finance lease, is the natural fit for vehicle acquisition because the asset itself carries the security and terms can be matched to the vehicle's useful economic life. Sale and leaseback on an owned fleet releases capital without disrupting operations.
On the working capital side, receivables finance against contracted shipper or freight-forwarder invoices bridges the gap created by long payment terms, and can be combined with fuel-card or supplier finance lines. Terminal, cross-dock or warehouse development is better suited to longer-tenor property or infrastructure debt sized on contracted throughput.
Portfolio refinancing of a mixed fleet — different ages, makes and residual values — is common practice and often releases meaningful capital in a single exercise rather than asset by asset.
What lenders scrutinise
Fleet lenders look closely at asset age and specification, maintenance history, and whether vehicles meet current emissions standards, since this determines residual value and resale liquidity. On working capital facilities, providers concentrate on customer concentration risk — a logistics business reliant on two or three large accounts is scrutinised differently to one with a diversified shipper base.
Driver retention, fuel-cost pass-through mechanisms in customer contracts, and insurance claims history also feature in underwriting, because they speak directly to the stability of forward earnings.
Where applications typically fail
The most common cause of a declined or delayed application is submitting fleet finance and working capital requests to the same generalist lender when the two require different underwriting skills. A second is understating fuel and driver cost inflation in forecasts, which erodes lender confidence once actuals diverge.
Applicants also frequently overlook that vehicles already under existing finance agreements limit the security available for a new facility; failing to disclose this upfront causes delay once due diligence uncovers it.
How GFG runs the process
GFG separates the fleet and working capital requirements at the outset, matching each to providers with relevant sector appetite — specialist fleet lessors for vehicles, receivables or trade providers for the cash-flow gap. Existing finance agreements and residual positions are mapped before approach, avoiding delay later in the process.
Providers are engaged only once the shipper base, contract terms and asset schedule are documented, so the initial conversation is with parties genuinely positioned to lend.
Can mixed fleets be refinanced together?
Yes, portfolio refinancing across a mixed fleet is common and often releases significant capital.
Can a logistics business fund vehicles and working capital through one facility?
Occasionally, through a broader asset-backed lending facility, but most operators are better served by separate structures: fleet finance secured on the vehicles and a receivables or cash-flow line for working capital. Combining both under one general facility usually results in a lower advance rate on each element.
How does GFG treat leased versus owned vehicles when arranging fleet finance?
Owned vehicles free of existing finance are the strongest security and can support sale-and-leaseback or refinance. Vehicles still under an existing agreement are assessed for equity above the settlement figure; where none exists, new finance is arranged only for unencumbered units or additions to the fleet.
Is funding available for owner-drivers or small fleet operators?
Yes, though facility size and provider choice scale with fleet size. Owner-drivers and small operators typically access asset finance on individual vehicles; larger receivables or working capital facilities generally require a minimum trading history and a diversified customer base.
What happens if fuel or driver costs rise sharply after funding is in place?
Most facilities are structured with fixed repayment schedules on the asset side, so cost inflation affects trading margin rather than the facility itself. Working capital lines with a revolving structure can typically be drawn further within the agreed limit if the increased cost is reflected in invoiced receivables.
Can terminal or warehouse infrastructure be funded alongside fleet renewal?
Yes, but as a separate facility. Infrastructure is financed on a longer tenor against contracted throughput or lease income, while fleet renewal is financed against the vehicles themselves; running both through a single lender is possible where that lender has appetite for both asset classes.