Quick answer
Courier and delivery businesses borrow for vans and electric vehicles, a depot or sorting space, driver wages before contract payments arrive, scanners and routing software, and taking on new delivery runs. Lenders read contract terms and client spread, fleet finance already in place, fuel and driver costs, and debtor days. Unsecured lending suits most needs; property security helps with depots and bigger fleets.
Key points
- Contracts with major shippers bring volume but set the terms.
- Vans are usually financed separately on the PPSR.
- Driver and fuel costs move faster than contract rates.
- Subcontractor drivers bring reporting obligations.
- Common uses
- Vans, depots, wages, new runs
- Lenders focus on
- Contracts, fleet, debtors
- Unsecured options
- Typically $5k – $500k
- Property-secured
- $20k – $5m
Parcels never stop, but delivery margins are thin and the cash cycle is unforgiving. A courier business pays for fuel, tolls, drivers and van repayments every week, while the shippers, retailers and platforms it delivers for often pay on monthly or longer terms. Lenders look at the strength of those contracts, the cost of running the fleet, and whether the business can stretch to the next run without stretching itself thin.
What do courier and delivery businesses borrow for?
- Vans and vehicles. Adding vans, replacing high-kilometre ones or moving to electric.
- New delivery runs. Vehicles, drivers and equipment to take on extra routes or a new contract.
- Depot and sorting space. Racking, conveyors, scanners, a lease bond and fit-out.
- Driver wages and subcontractor payments. Covering weekly costs while contract payments catch up.
- Technology. Routing, proof-of-delivery apps, handheld scanners and fleet tracking.
- Big repair bills. Keeping a van on the road when a gearbox fails mid-peak.
How does a lender look at a courier business?
The contracts. Who you deliver for matters most. Lenders ask how long you’ve held each contract, how it’s priced (per drop, per hour, per run) and how much notice either side must give. Work for well-established shippers reads well; reliance on a single platform with short notice reads as risk.
Debtor days. Large shippers set their own payment cycles. An aged debtors list shows whether payments arrive on time and how long the business must fund itself in between.
The fleet. Most courier vans are on vehicle finance or chattel mortgages, registered on the PPSR. A lender searches it to see what’s already committed and whether repayments fit the income.
Running costs. Fuel, tolls, tyres, insurance and maintenance can climb faster than contract rates. The ATO’s courier services benchmarks show typical cost ratios, and a business well outside them will be asked why.
Subcontractors. Many couriers pay owner-drivers rather than employ staff. Businesses in courier and road freight that pay contractors may need to report those payments in a taxable payments annual report, due by 28 August each year.
Offered extra runs but short on vans? See if your delivery business qualifies — finding out won’t affect your credit score.
Matching finance to the need
| Need | Typical structure | Why it fits |
|---|---|---|
| New or replacement vans | Vehicle finance or chattel mortgage | Van secures the loan; repayments match its life |
| Electric vans and chargers | Green finance or vehicle finance | Funds the upgrade over its working life |
| Wages while waiting on contracts | Cash-flow loan or line of credit | Covers short gaps, repaid as payments land |
| Depot purchase or big expansion | Property-secured loan | Larger amount, longer term |
The pattern that causes trouble is using a short-term facility to buy vans, or putting a cash gap on a five-year loan. Keep asset finance for assets, and flexible lending for timing.
Peak season: the courier’s cash squeeze
Late November through Christmas is the busiest stretch in delivery. Volumes can jump sharply, and many couriers add casual drivers, hire extra vans or run longer shifts. Costs rise immediately. The payments for that peak often arrive in January and February, just as volumes fall back.
Lenders familiar with the industry expect this. Courier businesses that arrange a working capital buffer in October — before the peak — tend to handle it smoothly. Those that leave it until mid-December are applying while their bank account is at its lowest point, which is the hardest time to borrow.
Documents to gather
- Business bank statements for six to twelve months
- Delivery contracts or service agreements
- Aged debtors list by client
- Vehicle list with existing finance and payouts
- BAS, financial statements and tax returns
Red flags lenders see
- One shipper or platform providing almost all the work.
- Vans with high kilometres and no replacement plan.
- Contract rates unchanged while fuel, tolls and wages rise.
- Subcontractor payments made in cash or poorly recorded.
- ATO arrears, which are assessed case by case.
Questions you can expect
- Who do you deliver for, and how long have you held each contract?
- How many vans and drivers do you run, employed and subcontracted?
- What are your payment terms with each client?
- What’s the age and finance position of your fleet?
- What will the new funds let the business take on?
Illustrative example
Illustrative example: a metro courier business running 12 vans is offered three extra runs by a national retailer, starting before the Christmas peak. It needs three more vans and a month of extra wages before the retailer’s first payment. It uses vehicle finance of around $150k for the vans, secured against the vans themselves, and a $40k unsecured working capital loan for wages and fuel during the first payment cycle.
For larger linehaul and freight operations, the trucking business loan guide explains how lenders look at heavy vehicles. The industry finder compares other transport and service businesses.
Owner-driver or fleet operator: what changes?
A single owner-driver is assessed much like a sole trader in any trade. The lender looks at personal and business bank statements together, how long you’ve held the run, and whether the van repayment sits comfortably inside the income. Applications are usually simple, and vehicle finance does most of the work.
A fleet operator with a depot, employees and subcontractors is a different conversation. Now the lender wants to understand the management layer: who allocates runs, how driver costs are controlled, how damage and fines are handled, and whether the business could replace a lost contract. Clear reporting — revenue by client, cost per van, driver utilisation — makes a fleet operator’s application far stronger.
Businesses growing from one to the other often hit a funding wall around five to eight vans, when overheads arrive before the extra volume. That’s exactly the point to plan finance ahead rather than react.
How is pricing worked out?
Every facility is priced on the business itself — its trading history, contract strength, fleet position, security and term. Vehicle finance may include a balloon or residual, which lowers repayments but leaves a lump sum at the end. Most loans carry an establishment fee, and property-secured loans may add legal and valuation costs. Ask about early payout terms, since fleets change often.
Ready to take on the next run?
If the work is there and the only thing missing is a van, a driver or a few weeks of cash flow, start with a 60-second enquiry. There’s no credit check to ask, and your details won’t be passed around a stack of lenders. A real person who understands how delivery contracts pay will look at your situation and call you. Please answer accurately — turnover, fleet size and the amount — so the first option we suggest matches the way your business runs.
Frequently asked questions
Can a single-van courier get a business loan?
Yes. Owner-drivers with steady banked income can look at vehicle finance for the van and small unsecured facilities for working capital. Lenders look at how long you've been on your runs and how reliably you're paid.
Can I finance electric delivery vans?
Yes. Electric vans can be financed like other vehicles, and lenders look at whether running cost savings and the work available support the higher purchase price. Charging equipment can sometimes be included.
Do lenders care if most of my work comes from one company?
They do. Many couriers rely on one or two large shippers or platforms. Lenders look at the contract terms, notice periods and how long you've held the work.
Can I borrow to set up a depot?
Yes. Fit-out, racking, sorting equipment and a lease bond can be funded. Buying the property itself usually suits a property-secured or commercial property loan.
Do subcontracted drivers affect my application?
They're common in the industry. Lenders want to see that payments to subcontractors are recorded properly and any reporting obligations are met.