Business Line of Credit for Trucking Companies
A business line of credit gives a trucking company a limit to draw on for fuel, repairs and payroll while it waits on broker payments, and it charges only on what's drawn. It's the cheapest way to bridge net-30 freight money, but funders want steady deposits, some time in business and a clean record with your factor if you have one.
Where a line fits a carrier's cash cycle
Waiting on brokers
Delivering a load today and getting paid in 30 or 45 days leaves a long gap for fuel and driver pay. Drawing on a line while invoices are outstanding and repaying when the broker pays keeps the cost to those weeks only.
Irregular repairs
Tires, brakes and DOT inspection fixes come up constantly but in small amounts. A line covers them without taking a new advance each time.
Not for buying trucks
Tractors and trailers belong on equipment financing, which runs for years. A line tied up in a truck purchase can't help with next month's fuel.
What drawing for a slow month costs
A $54,000 line at 2.25% a month backs a trucking company with $120,000 in deposits; the $20,400 drawn for a slow month comes back in three parts.
| Step | Balance on the line | Cost that month at 2.25% |
|---|---|---|
| Draw in the slow month | $20,400 | $459 |
| After one repayment | $13,600 | $306 |
| After two repayments | $6,800 | $153 |
| Paid back | $0 | $0 |
Total cost lands around $920; unused limit costs nothing unless there's a fee. QCEW job counts for truck transportation (NAICS 484) barely move (2 points top to bottom), so the dip here is hypothetical; swap in yours.
Line of credit or factoring?
Factoring turns specific invoices into cash and the factor collects from the broker. A line lets you borrow against the business as a whole and repay on your schedule. Some carriers use both, but a factor that holds a blanket claim on receivables can limit what a line funder offers, so share your factoring agreement early.
What funders look for
- A business bank account with steady weekly deposits.
- Time in business and a track record with your main brokers.
- A credit score above the funder's floor.
- Few or no open daily advances.
Limits usually start modest for newer carriers and grow with a record of drawing and repaying on time.
Quick answers
Can a trucking company get a business line of credit?
Yes, if deposits are steady and the business has some history. Funders look at time in business, credit, how many advances are open and whether a factor has a claim on your receivables. Newer carriers usually start with a smaller limit that grows as they draw and repay on time.
Is a line of credit better than factoring for a trucking company?
They do different jobs. Factoring turns invoices into cash right away and the factor collects from brokers. A line lets you draw what you need and repay on your own schedule, paying only on the balance. Many carriers keep factoring for steady cash flow and use a line for repairs and gaps.
What does a trucking line of credit cost?
You pay a rate on what you've drawn, for as long as it's out, and sometimes a draw or maintenance fee. Nothing accrues on the unused limit unless the contract says so. Compare the cost of a typical draw with a factoring fee on the same invoices to see which is cheaper.
More for trucking companies
- Same-day merchant cash advance for trucking companies
- Second position MCA for trucking companies
- MCA consolidation for trucking companies
- Revenue-based financing for trucking companies
- How funders read trucking companies
- Business line of credit: how it works
Run your own numbers with the MCA APR calculator.
Want to see what fits a trucking company like yours?
Tell us your slow months and your open advances, and we'll shop the file with funders whose programs fit. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.