Logistics business loans for haulage, freight, warehousing and distribution

Yes. Counterbalance and reach trucks are funded on hire purchase or a lease secured on the trucks themselves, and a used truck with a service history is as fundable as a new one. Racking, mezzanines and conveyors are a different proposition, because a large share of the cost is installation and the kit is worth little once it is taken down, so lenders fund them as part of a wider package, on a term loan or against other assets the business owns. Warehouse management software and scanners go on a loan or an IT lease. We arrange finance for 3PLs, pallet network members and distribution firms fitting out a new unit, and we can run the forklifts, the racking and the software as separate agreements so each matches the life of what it pays for.

How often does a forklift need a thorough examination?

Under the Lifting Operations and Lifting Equipment Regulations a forklift needs a thorough examination at least every 12 months, and every 6 months if it is used to lift people or carries lifting accessories such as chains and slings, unless a written examination scheme sets different intervals. A competent person carries out the examination and writes a report, and the HSE says that person should be independent and impartial rather than the one who services the truck day to day.

• Budget for it. A thorough examination is separate from routine maintenance, so a lender reviewing a fleet plan expects to see both costed.
• Leased trucks. The operator, not the finance company, is responsible for examinations on a truck it has on hire purchase or a lease.
• Used trucks. Ask the seller for the last examination report, because a lender may want it alongside the service history.
• Operator training. Lenders funding a first truck sometimes ask who is trained to drive it, so have the certificates ready.

The HSE explains thorough examinations of lifting equipment. Our forklift finance and warehouse equipment finance pages cover the options in detail, and Instant Quotes shows which panel lenders fund materials handling kit before any credit search is made.

Yes, and it is often the better structure. A curtainsider, box trailer or fridge trailer has a longer working life than the unit that pulls it, so lenders will fund trailers on hire purchase over their own term while the tractor units sit on a separate agreement. Used trailers are accepted with a recent inspection and a clear test history, and trailers the business already owns outright can be refinanced to release cash for a new contract. Lenders look at the work the trailers will do, the customers behind it and the maintenance arrangements. We source trailer finance for hauliers, pallet network members and distribution firms, including fleets of twenty or more on one facility.

Do trailers need an annual test?

Yes, for the trailers a logistics business runs. GOV.UK lists semi trailers, trailers with an unladen weight of more than 1,020kg and powered braking systems, A frame trailers and converter dollies made on or after 1 January 1979, and horseboxes with a gross weight above 3,500kg. The first test falls one year after the trailer was first sold or supplied, and it is repeated every year after that.

• Test history. A lender funding a used trailer will ask for its test and maintenance records, so collect them from the seller before you apply.
• Operator licence. The trailers run under the operator licence that covers the units pulling them, and the traffic commissioner expects a maintenance plan for both.
• Fridge units. The refrigeration unit on a fridge trailer is often funded on the same agreement, and its service history matters as much as the trailer's.
• Refinancing. Owned trailers with years of life left can be refinanced, with the lender taking security over them and advancing a share of their value.

GOV.UK sets out the annual test for lorries, buses and trailers. Our haulage and HGV finance page covers the units, and asset refinancing explains how owned trailers release cash. Instant Quotes lists panel lenders that fund trailers, without a credit search.

Most transport funding problems are timing problems. Fuel is bought daily or weekly on a fuel card, drivers are paid weekly or monthly, subcontract hauliers booked through freight exchanges expect prompt payment, and ferry, toll and port charges are paid at the time. The customer is then invoiced after delivery, often monthly, and pays 30 to 90 days later. The faster a logistics firm grows, the wider that gap becomes.

On top of that sit the lumpy costs: a tractor unit that needs a new gearbox, annual fleet insurance, tyre replacements across a trailer fleet, and vehicle excise duty and levies. Fuel surcharge clauses help, but they usually lag the pump price by a month or more, so a sharp rise in diesel costs is carried by the operator before it is recovered.

Vehicles are usually the largest capital outlay, and because commercial vehicles hold value and are easy to recover, they suit asset finance. Hire purchase suits vehicles you will run for most of their life; leases and contract hire suit fleets replaced on a fixed cycle. Growing operators often agree a block facility so several vehicles can be added under one approval. Our vehicle and fleet finance page compares the structures, and the HGV page covers trucks and trailers in detail.

Warehouses need a different kit list: pallet racking and mezzanines, counterbalance and reach trucks, warehouse management software, scanners, dock levellers and conveyor systems. Forklifts and reach trucks are well understood by lenders (see forklift finance). Racking and mezzanines are funded more cautiously because much of their cost is installation, and warehouse software is a soft asset that some lenders fund only alongside hardware.

Operators that own their vehicles outright can release cash through asset refinancing, which is often quicker than an unsecured loan for funding a new contract.

Businesses running goods vehicles over 3.5 tonnes for hire or reward need an operator's licence, and must show financial standing: enough money available to run and maintain the authorised vehicles. The goods vehicle operator licensing guide explains the rules. Lenders funding a haulage business will ask for the licence number, number of vehicles authorised, and whether the traffic commissioner has taken any action. Our HGV page covers how financial standing interacts with new facilities.

Lenders also ask about the operating centre. A 3PL or haulier on a short lease, or on a site without planning permission for the vehicles it runs, is a weaker credit than one with a long lease or freehold. Buying a depot or warehouse can be funded through a commercial mortgage.

Urban operators should factor in clean air zone charges when deciding whether to keep older vehicles or replace them, because a daily charge on a non-compliant truck or van can change the numbers on a replacement.

• Adding vehicles ahead of work. Finance commitments continue if a contract ends. Match the term to the contract where you can, or choose vehicles with a strong resale market.
• Overlapping security. An invoice finance debenture and multiple vehicle lenders need to sit together, and a lender's charge over a vehicle limits what you can do with it.
• Balloon payments. Lower monthly payments on lease purchase mean a large final sum, which needs planning.
• Personal guarantees. Common on working capital and on younger businesses' vehicle finance.
• Other levers. Negotiating fuel surcharge clauses that update faster, shorter payment terms from key customers, HMRC Time to Pay for a temporary tax gap, or subcontracting a peak rather than buying vehicles for it.