What are typical eligibility criteria for logistics finance (time trading, affordability, credit profile)?

Short answer

Most UK lenders assess logistics finance eligibility on three pillars: time trading, affordability, and credit profile. In practice, established trading history (often 12–24 months), demonstrable cash flow to service repayments, and a stable business and director credit record are the baseline, with sector-specific checks such as Operator’s Licence compliance, insurance, and quality of receivables for invoice finance. Criteria vary by product (asset finance, invoice finance, unsecured loans), lender, and risk banding.

For a deeper dive tailored to transport, haulage, and distribution firms, see our guide to logistics business loans.

Eligibility criteria explained

Time trading and trading history

Time trading indicates stability and operational reliability, and many lenders look for a minimum of 12 months’ trading, with 24 months preferred. Some asset finance providers will consider 6–12 months if directors have strong sector experience, a sensible deposit, and robust contracts in place. New-start logistics businesses can be considered by niche lenders for specific assets, but the hurdle is higher and pricing reflects risk.

Typical benchmarks by facility type

Asset finance (HGVs, vans, MHE, telematics): 6–24 months trading, with 12 months a common minimum.
Invoice finance (factoring or discounting): 3–12 months trading can be acceptable if you issue B2B invoices on terms and can evidence clean collections.
Unsecured term loans/working capital: 12–24 months trading and consistent turnover are typically required.

Lenders will review filed accounts, management accounts, VAT returns, and 6–12 months of business bank statements. Evidence of ongoing work, such as framework agreements, purchase orders, and confirmed routes with reputable shippers, is valued because it helps predict future cash flows.

Sector specifics that support “time trading”

Valid Standard or Restricted Operator’s Licence and up-to-date maintenance records.
Demonstrable compliance with traffic commissioner undertakings and tachograph rules.
Stable customer base with repeat lanes, not just ad-hoc spot market jobs.

Seasonal patterns are normal in logistics, so trend lines matter as much as averages. Lenders may normalise revenue for seasonality and look for resilience through quieter months, including how fuel, insurance, and wages are managed.

Affordability and serviceability

Affordability is the core test for logistics finance and it focuses on whether your business can comfortably meet repayments after essential operating costs. Lenders typically look for a Debt Service Coverage Ratio (DSCR) above 1.2x–1.5x, meaning operating profit and add-backs are at least 20–50% greater than total debt repayments. For asset finance, underwriters also examine job margin per vehicle, utilisation levels, and the residual value profile of the equipment.

What lenders review for affordability

Bank statement analysis: average monthly inflows, volatility, returned items, and peak-to-trough cash swings.
Profitability and cash conversion: EBITDA, depreciation, and timing of VAT and PAYE outflows.
Existing commitments: HP/lease payments, invoice finance fees, fuel cards, and any HMRC Time to Pay plans.

For invoice finance, affordability is partly embedded in the facility structure because funding flexes with turnover. However, lenders still assess headroom after service fees, discount charges, and any credit insurance premiums, alongside eligibility rules for your debtor book.

Practical affordability ranges

Unsecured loans: monthly repayments are typically capped so that total fixed debt outgoings stay within prudent DSCR limits.
Asset finance: deposits of 0–20% help affordability, and terms can run 24–72 months depending on vehicle age and mileage.
Invoice finance: advance rates of 80–95% on eligible, undisputed B2B invoices with 30–90 day terms are common.

Affordability is also about resilience. Lenders prefer contingency capacity for fuel price spikes, unscheduled maintenance, or short-term loss of a route, and may ask for a brief explanation of your contingency plans.

Credit profile (business, directors, and debtors)

A strong credit profile lowers risk and improves access and pricing, while blemishes don’t automatically rule you out if the rest of the case stacks up. Underwriters review Companies House data, credit bureau scores, any CCJs, and the timeliness of filings and payments. They also look for arrears with HMRC, supplier stretch, and evidence that issues are either resolved or in a formal arrangement.

Business and director credit

Business credit: stable file, on-time filings, and no unsatisfied CCJs or recent defaults.
Director credit: soft checks are common, and many lenders require personal guarantees for unsecured loans and sometimes for asset finance.
Tolerance for adverse: satisfied, historic CCJs may be acceptable; recent or unsatisfied adverse will narrow lender choice and raise price.

For invoice finance, the creditworthiness of your customers (debtors) is critical. Lenders consider concentration risk, dispute rates, and sector risk for your end customers, favouring large, established counterparties with reliable payment performance.

Documentation that supports credit assessment

Aged debtor and creditor reports with commentary on overdue items and disputes.
Proofs of delivery (POD/ePOD), signed CMRs, and clean invoice histories.
Insurance schedules, including goods-in-transit and motor fleet cover.

A transparent narrative helps. If you have historic issues, explain context, remedy, and what controls prevent recurrence, which builds lender confidence.

Security, documents, and logistics-specific factors

Security and documentation requirements vary by product and the type of assets or receivables involved. For vehicle and equipment finance, the asset typically acts as primary security, and lenders may require a personal guarantee and, occasionally, a debenture. For unsecured loans, security may include personal guarantees and a debenture over the business, depending on facility size and risk.

Common sector requirements

Operator’s Licence and compliance evidence, including maintenance and inspection schedules.
Vehicle details: age, mileage, specification, and anticipated residual values.
Insurance: motor fleet, goods-in-transit, and employer’s/public liability.

For invoice finance, lenders check invoice assignment mechanisms, notice of assignment, and the robustness of your billing and collections process. They will review debtor limits, concentration caps, verification methods, and any credit insurance arrangements.

Indicative constraints and checks

Vehicle age limits: many lenders prefer funding younger assets, though specialist funders can support older HGVs.
Deposits: 0–20% is typical; higher deposits can offset thinner credit or shorter time trading.
Contracts and frameworks: evidence of lanes with reputable shippers supports stability.

Lenders prize operational discipline in logistics. FORS accreditation, telematics usage, driver CPC compliance, and incident management processes all add strength to your case.

How to strengthen eligibility and how Best Business Loans helps

You can materially improve eligibility and pricing by preparing a clear, lender-ready pack and addressing any control gaps. File accounts on time, keep bank statements clean of returned items, and show consistent HMRC compliance or a formal Time to Pay plan. Reduce debtor disputes with robust POD processes and consider credit insurance for significant concentrations.

Your lender-ready checklist

12 months’ business bank statements and latest filed accounts plus year-to-date management accounts.
Aged debtor/creditor listings with commentary, key contracts, and proof of routes or purchase orders.
Asset schedule, insurance documents, Operator’s Licence and maintenance evidence, and ID/KYC documents.

Best Business Loans does not lend or provide advice, but we help you navigate the market and connect with suitable lenders or brokers. Our AI-led matching considers your trading history, affordability profile, and credit posture to shortlist providers more likely to support your logistics business. Submit a Quick Quote to receive an introduction to relevant partners and compare your options without obligation.

FAQs

How long must a logistics company be trading to qualify?

Many lenders prefer at least 12 months’ trading and stronger options at 24 months. Asset finance for vehicles can be available from 6–12 months with a deposit and experienced directors. Invoice finance may be accessible from 3–6 months if you issue clean B2B invoices and have reliable debtors.

What affordability metrics do lenders use for logistics finance?

Underwriters commonly use DSCR of 1.2x–1.5x as a guide, alongside bank statement analysis. For asset finance, they also review vehicle utilisation and job margins. For invoice finance, affordability is assessed against fees, advance rates, and debtor quality.

Can I get finance with a poor credit history?

Adverse credit narrows choices and increases cost, but some funders will consider cases with satisfied, historic CCJs. A deposit, strong contracts, and transparent explanations help. Expect more emphasis on security, guarantees, and affordability headroom.

Is a Personal Guarantee required?

Personal Guarantees are common on unsecured loans and not unusual on asset finance, especially for newer or smaller firms. The requirement depends on risk, facility size, and lender policy. Invoice finance may also include director guarantees and warranties.

What is the minimum turnover for logistics finance?

Thresholds vary by lender and product, but many unsecured lenders look for annual turnover of £100k–£250k+. Asset finance can suit lower turnover if affordability is proven. Invoice finance minimums can start around £250k annual invoicing, with niche providers considering lower in some cases.

Compliance and transparency notice

Best Business Loans operates as an independent introducer. We do not offer loans or provide financial advice, and nothing on this page should be taken as a recommendation or promise of acceptance.

Eligibility, rates, and terms are set by the lender or broker you choose and depend on your circumstances.
All information here is “clear, fair and not misleading” to the best of our knowledge and should be verified before you act.
Submitting a Quick Quote is free and without obligation, and any quotes you receive are indicative until fully underwritten.

Key takeaways

Time trading: 12–24 months is typical, with specialist options from 6 months for assets and 3–6 months for invoice finance.
Affordability: DSCR of 1.2x–1.5x, strong bank statement conduct, and clear contingency for sector volatility are key.
Credit profile: stable business and director credit, clean debtor book, and transparent handling of any historic issues matter.
Sector factors: Operator’s Licence, insurance, maintenance, and proof of repeat work strengthen your case.
Preparation: a lender-ready pack speeds decisions and can improve pricing and terms.

Updated: October 2025

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