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Fuel and costs

New Authority, First 90 Days: Plan the Cash Gap

A new carrier pays for fuel, drivers and insurance before the first broker payment lands. A 3-month example shows a $1,000 gap against a $21,000 gap, on the same trucks and loads.

5 min read

Cash by month for a new carrier: if brokers pay after 1 month, cash dips to minus $4,500 and recovers to $2,500; if they pay after 2 months, cash falls to minus $21,000 and is minus $17,500 at month 3 (example data)$0-$21,000Pays after 1 monthPays after 2 monthsStartMonth 1Month 2Month 3

Why this matters. The authority is active, the truck is insured and the first loads are booked. Then comes the part nobody posts on a load board. Fuel is paid at the pump, the driver is paid on payday, insurance is due on its date. The brokers pay later. For a new carrier the gap between those two lines is often the real risk in the first quarter, and it can be sized before the first load.

A planning model, not advice

Every number below is invented to show the shape. Your costs, your loads and your brokers' terms will differ. This is not financial or legal advice, and your contracts come first.

Costs first, cash later

A new carrier often has no payment history with brokers, and each broker sets its own terms. We have no data on whether brokers pay new carriers more slowly, so we make no claim about it. Ask each broker for its terms in writing. What the model needs is the longest payment wait you expect, plus the days it takes you to send the paperwork.

The example: same trucks, two payment speeds

Example data: starting cash of $12,000, invoiced revenue of $20,000 a month and costs of $16,500 a month. In the first case brokers pay one month after the work. In the second, two months.

Example data: cash at the end of each month
MonthPays after 1 month: flowsCashPays after 2 months: flowsCash
Month 1$0 in, $16,500 out-$4,500$0 in, $16,500 out-$4,500
Month 2$20,000 in, $16,500 out-$1,000$0 in, $16,500 out-$21,000
Month 3$20,000 in, $16,500 out$2,500$20,000 in, $16,500 out-$17,500

Invented figures. Cash = previous cash + money in - money out. Starting cash is $12,000.

Month 1 in both cases: $12,000 + $0 - $16,500 = -$4,500. In the one-month case the first payment arrives in month 2 and cash climbs back above zero in month 3. In the two-month case nothing has arrived by the end of month 2, so cash falls to -$21,000 and is still -$17,500 at the end of month 3.

Example data: the cushion each case needs
CaseLowest cashCushion to stay above zero
Brokers pay 1 month later-$1,000$1,000
Brokers pay 2 months later-$21,000$21,000

The second case needs about 21 times the cushion of the first, only because cash arrives a month later. Same loads, same rates, same trucks. Your numbers will differ. The shape will not.

Build your own 90 days

  1. List monthly costs. Fuel, driver pay, insurance, truck payment, ELD, permits, repairs. Use real quotes, not guesses.
  2. Estimate invoiced revenue. Loads per week times the average rate. Be modest in the first month.
  3. Set days to pay. The longest term you expect plus the days it takes you to send paperwork.
  4. Find the lowest point. Month by month: starting cash plus money in minus money out.
  5. Pick a lever and price it before you need it.

The levers, and what each one costs

  • A cash cushion. It costs you the money tied up in it, and it is yours to use.
  • Quick pay. A fee per invoice for early cash. See our quick pay fee math article to turn the percent into a cost per day.
  • Factoring. A third party advances cash for a fee and terms. Read the contract before the rate.
  • Faster payers. Ask each broker for its terms in writing and prefer the ones that pay sooner when rates are equal.

Every one has a price, and the price is lower when you learn it while cash is fine, not when it is short.

Reading the lowest point

The lowest cash balance in the model is the number to act on. In the one-month case it is -$1,000 and arrives in month 2. In the two-month case it is -$21,000, also in month 2. The month matters as much as the amount. It tells you how much time you have to arrange the cushion, a quick pay agreement or a credit line before the bank balance does it for you.

Run the same model with three variations: costs 10% higher, revenue 10% lower and payment one month slower. Whichever hurts most is the one to price first. Do it before the first load, when the answer is a spreadsheet, not a missed payment. Keep the sheet and redo it at day 30, with real invoices and real deposit dates in place of the guesses.

Common first-quarter mistakes

  • Counting booked loads as cash. Booked is not billed, and billed is not paid.
  • Skipping fixed costs. Insurance and payments hit early. List them first.
  • Taking every load. Slow payers and thin rates stretch the gap. Set a floor with the minimum rate tool.

Common questions

  • Is factoring right for a new carrier? It can bridge the gap, and it has costs and terms. Compare it with the other levers. Our factoring vs direct billing guide sets out the trade-off.
  • How big a cushion do I need? Run your own model with your costs and pay speeds. The lowest point is your answer, plus a margin you are comfortable with.
  • Is revenue the same as cash? No. An invoice you sent is not money you can spend. Count cash only when it lands, and check unpaid invoices every week with the invoice aging tool.
  • Where do I start on paperwork? With the authority and insurance check to see what brokers look at before they book you.

Change the pay speed yourself in the cash flow simulator and watch 13 weeks move. Already running and curious how fast your brokers really pay? Send us your last 20 loads.

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