Glossary · Trucking Finance
Working Capital.
Short-term unsecured business funding used to bridge cash-flow gaps, cover operating expenses, or capitalize on opportunities; APR typically 14–34%.
What it is
Working capital is short-term unsecured business funding — no collateral required. It is used for covering operating expenses during slow weeks, bridging factoring delays, paying for emergency repairs, and funding growth investments like a second truck or a fuel-card deposit. APR observed on the Dispatched panel runs 14–34%, with terms typically 6–24 months. Repayment is commonly via daily or weekly ACH debits.
Working-capital underwriting is based on bank deposits and credit — no asset valuation needed, no equipment appraisal. Funding speed is fast: 24–72 hours from approval to deposit. Working capital is not the same as a Merchant Cash Advance. Working capital is a true loan with a stated APR, fixed repayment schedule, and amortization. An MCA is a sale of future receivables priced with a factor rate. The structural difference matters for tax treatment, default rights, and how lenders view the obligation when underwriting subsequent facilities.
Why it matters for trucking finance
Working capital is the trucking carrier's cushion for unexpected events. A blown engine doesn't have to mean a missed truck payment if working capital is in place. APR is higher than equipment loans because the loan is unsecured, short-term, and priced for speed. For first-time owner-operators, working capital is harder to qualify for than equipment financing — there's no asset to underwrite, so build 6+ months of bank statements first. Misuse — covering persistent operational losses — accelerates insolvency.
Related terms
- Merchant Cash Advance (MCA) — Lump-sum cash advance against future business revenue, typically with daily ACH deductions; high effective APR but easier qualification than term loans.
- Line of Credit — Revolving credit facility allowing the carrier to draw funds as needed up to an approved limit; pays interest only on drawn balance.
- Term Loan — Lump-sum business loan repaid over a fixed schedule with interest; the standard structure for equipment purchases and major capital expenditures.
Related Dispatched products
Ready to qualify?
The vocabulary above is the upper-funnel layer. If you are ready to move on financing, factoring, or insurance, start the matching flow — soft pull, no credit impact to begin.