Logistics keeps Britain moving; finance must keep pace
With more than 2,000 UK road haulage companies entering insolvency between 2021 and 2025*, Ed Rimmer, CEO of independent SME lender, Time Finance, shares his thoughts on how funders can support the vital businesses that keep the country moving.
“The haulage and logistics sector is one of the UK’s most important industries. It underpins every supply chain, supports every region and enables businesses across the economy to function. From manufacturing and retail to healthcare and construction, there is no doubting the industry’s contribution to the economy.
“The UK logistics sector contributes around £170bn annually and employs more than 8% of the national workforce. As the government looks to drive economic growth and productivity, supporting the businesses that keep the country moving should be our priority.
“And yet, the industry continues to operate in a challenging environment. Global economic uncertainty, fluctuating fuel and operating costs, supply chain disruption and ongoing pressure on margins all create financial strain. Larger operators may have the necessary reserves to absorb these pressures, but many SMEs sit in what could be described as the ‘squeezed middle’ – too large to be agile and too small to have significant cash buffers.
“These businesses face a particularly difficult balancing act. They need to invest in vehicles, trailers, technology and people to remain competitive, while also managing day-to-day cashflow and maintaining sufficient liquidity to meet operational and regulatory requirements.”
Cashflow pressures are becoming the industry’s biggest challenge
“One of the most significant financial considerations for haulage operators is compliance with their Operator Licence (O-Licence) financial standing requirements. Businesses must demonstrate they have adequate financial resources available to operate their fleets. While these rules play an important role in maintaining standards across the industry, they can also place pressure on working capital, particularly for growing operators looking to add vehicles or expand services.
“At the same time, many haulage businesses are managing lengthy customer payment terms while absorbing substantial upfront costs. The result is that cashflow, rather than profitability, often becomes the key challenge.
“Sadly, the pressures facing the sector are reflected in business survival rates. More than 2,000 UK road haulage companies entered insolvency between 2021 and 2025 – almost double the number recorded in the five years before Brexit, equating to nearly eight haulage businesses failing every week. That statistic highlights just how difficult the operating environment can be, particularly for SMEs.
“Government support has provided some welcome assistance. Measures including fuel duty reductions, road tax support for hauliers and the continued availability of the Annual Investment Allowance have helped businesses manage costs and invest in growth. These initiatives recognise the strategic importance of the sector and the need to support investment. However, policy measures alone cannot address the ongoing cashflow challenges many operators face. Access to appropriate finance remains critical.”
Flexible finance can help businesses navigate uncertainty
“This is where independent lenders can play an important role. Traditional funding solutions, such as fixed term loans, do not always reflect the realities of asset-heavy industries such as transport and logistics. Businesses may own valuable assets and maintain healthy order books while still experiencing pressure on working capital due to payment cycles, investment requirements or regulatory obligations.
“The answer is increasingly found in flexible, multi-product funding structures that support both growth and cashflow. Asset Based Lending (ABL), for example, allows businesses to unlock value from invoices and other assets already sitting on the balance sheet. Invoice finance can release cash tied up in unpaid invoices, while asset finance can support fleet investment without placing unnecessary strain on cash reserves. This approach enables operators to access funding that grows alongside the business, rather than relying on a single finance product that may not fully meet their needs.
“The demand for these solutions is clear. Within our own invoice finance portfolio, transport, haulage and logistics businesses account for approximately 15% of our client base. That points to a long-term and ongoing need for cashflow support in a sector where operational demands and customer payment cycles rarely align perfectly.
“As economic conditions continue to evolve, the businesses that keep goods moving around the UK need funding partners that understand the realities they face. Supporting logistics businesses is not simply about financing vehicles or releasing working capital; it is about supporting the supply chains, employers and regional economies that rely on them. If logistics is fundamental to economic growth, then ensuring businesses have access to flexible, sector-specific finance should be viewed as part of the infrastructure that supports it.”
*Secretary of State for Business and Trade on 3 February 2026