Freight broker cash gap calculator

What the cash gap is

Brokers often pay carriers well before shippers pay them. The money you have out in between is your cash gap. A brokerage can be profitable on paper and still run short of cash, especially while it is growing.

How to use this calculator

Enter your loads per week, your average carrier pay, and how many days it usually takes you to pay carriers and to get paid by shippers. You get the gap in days and an estimate of the cash tied up.

The formula

Gap in days = days until shippers pay − days until you pay carriers
Cash tied up = (loads per week × average carrier pay ÷ 7) × gap in days

A worked example

At 10 loads a week with $1,700 average carrier pay, you pay out about $2,429 a day. If you pay carriers in 15 days and shippers pay you in 45, the gap is 30 days, which ties up about $72,857.

Ways to shrink the gap

• Send invoices the day you have proof of delivery. Every day you wait is a day you fund.
• Set credit limits so one slow shipper can’t absorb all your cash.
• Negotiate shorter terms with slower shippers, or price longer terms into your rate.
• Consider factoring for specific invoices, and compare what it costs against your margin.

Common questions

How much working capital does a new freight broker need?

It depends on your volume and payment terms. Enter your own numbers above, then add a cushion for slow payers.

Does growth make the cash gap worse?

Yes. More loads at the same terms means more money out before any comes back, so the gap grows with volume.

Is this figure exact?

No. It’s an estimate that assumes loads are spread evenly across the week and that everyone pays on time.