‘Fuel today, payouts today, service today. And payment for freight? Someday…’. Factoring in transport and logistics: how to finance costs with long terms
Managing finances in a transport company can be quite a juggling act: before a truck even sets off on a route, the company must pay for diesel oil, the driver’s salary, cover the costs of leasing installments, tolls, or possible service. The goods reach their destination, you issue an invoice and… you wait. Sometimes 60, and sometimes even 90 days for a transfer from the client. At a time when maintaining financial liquidity is becoming an increasing challenge, it is worth considering factoring for transport and logistics companies. What does this tool look like in practice? Let’s check!
Key takeaways:
- The rapid increase in operating costs colliding with long payment terms (reaching up to 90 days) is one of the biggest challenges faced by companies in the TSL industry today.
- Factoring for transport companies allows converting issued and non-overdue receivables resulting from freight invoices into real inflows, which usually reach the carrier’s account within 24 hours.
- A professional factor does not judge by dry algorithms but offers flexible financing without demanding “hard” collateral on the fleet or penalties for turnover fluctuations.
As market analyses clearly show, the TSL sector has for years ranked at the top of industries most affected by payment bottlenecks, and the total debt of companies in the BIG InfoMonitor register and the BIK database at the end of December 2025 already amounted to nearly 3.3 billion PLN.
Transport entrepreneurs fall victim to a market standard: larger players, retail chains, and powerful production plants impose very long payment terms from above, often amounting to 60 or 90 days. For the owner of a small or medium-sized transport company, this means considerable stress and the need to constantly credit their clients out of their own pocket, while current liabilities (fuel, taxes, ZUS) are enforced immediately.
A race against time, costs, and... the domino effect
In an ideal accounting world, an issued invoice means revenue from which costs can be covered and a profit generated. In the brutal reality of highways and warehouses, an accounting entry will not refuel a truck. As a result, it happens that even though the fleet carries out subsequent orders, the checking account may lack funds for daily operations because the working capital is stuck in the supply chain.
– The pressure that Polish carriers are facing today is unprecedented. On the one hand, rising labor costs, road tolls, and the dictate of fuel prices; on the other – clients demanding transport for yesterday and payment in a quarter. A bottleneck does not have to be the result of a contractor’s bad intentions. It takes just one downtime in settlements at the top of the supply chain for the domino effect to hit the carrier – explains Leopold Kasjaniuk, General Manager at Ifis Finance. – That is why more and more of our clients are stopping treating factoring in transport as an emergency option, and rather as a natural cash flow management tool – he adds.
What is factoring in transport and how does it solve the problem of frozen funds?
The solution to the above stalemate does not have to be another working capital loan burdening the balance sheet. Before we go to the bank to put the company’s assets on the line, it is worth considering a much more flexible and accessible alternative – factoring for transport companies.
Here is how this tool works in practice:
- You carry out transport or a logistics service and issue the client an invoice with a deferred (e.g., 60-day) payment term.
- Instead of putting it “in the drawer,” you transfer the document (assign the receivables) to your factoring partner (the factor).
- The factor pays you an advance (usually in the amount of 80-90% of the gross invoice value) almost immediately, mostly within one business day.
- You can spend the received cash on current costs: fuel, leases, drivers’ wages, or insurance.
- Your principal, in accordance with the date on the document, pays the invoice directly to the factor’s account after 60 days.
- The final settlement takes place: the factor transfers the remaining, previously unfinanced part of the receivables (e.g., 10-20%) to your account, minus the agreed commissions and financing costs. This step effectively closes the transaction.
But what if the designated time passes and the principal does not pay?
In the transport business, full of unexpected turns, such situations, of course, also happen. Who bears the risk? Everything depends on the variant of cooperation with the factor you choose:
- Recourse factoring (incomplete): If your contractor, despite reminders and actions in the field of so-called soft debt collection, ultimately does not settle the debt, the financial responsibility remains on your side. In such a situation, you are obliged to return the paid advance (most often this is deducted from receivables from other current invoices submitted for financing). This is a good solution when working with regular, trusted principals.
- Non-recourse factoring (full): In this variant, we – as your factor – take 100% of the risk of your contractor’s insolvency upon ourselves. If the debtor declares bankruptcy or falls into so-called chronic delay, the advance paid at the beginning remains safe in your company’s account. This is a powerful protective shield, especially useful when starting cooperation with new entities or in international transport (so-called export factoring).
What advantage does factoring give to logistics and transport companies?
Unlocking cash inflows is just the beginning. Factoring for logistics and transport companies acts a bit like a turbocharger for company finances. Having quick access to remuneration for services rendered, you gain a real bargaining chip in talks with suppliers. By paying in advance for vehicle service or new fleet insurance, you can negotiate discounts that will realistically lower your operating costs and often even fully cover the cost of the factoring service itself.
Moreover, as a carrier, you become a much more attractive partner for large market players. You can freely agree to 60-day payment terms imposed by production giants, knowing that you will receive the funds from the factor the next day anyway. Secure the liquidity of your fleet and shift into a higher gear. Focus on getting new orders and leave invoice financing to the experts!
Frequently asked questions (FAQ) about factoring for transport and logistics companies
Does factoring for transport companies require collateral on the vehicle fleet?
No. The basic and main collateral for a factoring transaction at Ifis Finance is the undisputed receivable itself documented on the invoice (assignment of receivables) and a blank promissory note. We do not require being entered into truck registration documents or establishing a mortgage on your real estate.
What happens if my contractor does not pay for the transport?
Everything depends on the chosen service variant. In incomplete factoring (with recourse), the risk of your client’s insolvency remains on your side – if the contractor does not settle the receivables, you are obliged to return the paid advance. However, if you choose full factoring (without recourse), Ifis Finance takes the entire risk of non-payment upon itself. It is worth clearly emphasizing that this assumption of responsibility applies to two situations:
- Legal insolvency – documented conditions, such as the official declaration of a contractor’s bankruptcy or the opening of restructuring proceedings.
- Factual insolvency (so-called chronic delay) – a situation in which the debtor simply does not pay for a strictly defined, longer time, despite our reminder and debt collection activities.
It should only be remembered that the condition for this protective shield to work is the undisputed nature of the invoice – the insurance will not work if the lack of payment results from a direct commercial dispute (e.g., an allegation of damage to goods in transport). However, if the freight was carried out flawlessly and the debtor loses liquidity, the cash you received is completely safe.
Does factoring for logistics companies support the execution of foreign contracts?
No. When using factoring at Ifis Finance, you do not have to change your current checking account or sign cumbersome power of attorney documents for company accounts. Freed financial resources go in the form of an advance pDefinitely yes. Export factoring is an excellent solution facilitating cooperation in international traffic. As a factor belonging to an Italian banking group, we have the ability to instantly verify debtors from foreign markets (especially from Southern Europe and Italy), supporting Polish companies in safe expansion and taking over the financial risk of foreign recipients. ayment directly to the account indicated by you in the verification process.
