What is stacking, and why do funders decline it?
Stacking is taking a second or third advance while an existing one is still outstanding. It is the single largest decline reason in the market, because each position adds another daily debit and three positions at 12–15% each can consume 35–45% of daily deposits.
Start an applicationThe problem is arithmetic rather than principle. One position at 12% of deposits is serviceable for most businesses. A second takes it past a quarter of gross receipts, and a third routinely pushes total debt service beyond 35% — a level almost no operating business sustains while also paying payroll, rent and suppliers. Funders decline stacked files because the loss data on them is unambiguous.
Positions also price sequentially. Each additional position sits behind the ones before it in recovery, so it costs more and runs a shorter turn, which raises the daily debit again. The third position is both the most expensive money in the structure and the one applying the most pressure — the combination that turns a cash-flow problem into a solvency one.
Funders identify existing positions from bank statements rather than from disclosure: regular same-amount debits with recognisable ACH descriptors are visible whether or not they are declared. Failing to disclose an existing position does not conceal it; it removes the option of structuring around it, and on most paper it is a breach of the agreement.
What secures each product
Figures are typical ranges for a complete file, not guarantees. Final terms depend on revenue, time in business, credit profile and lender review.
| Merchant Cash Advance (MCA) | Unsecured |
|---|---|
| Business Line of Credit | Often unsecured |
| Invoice Factoring | A/R is the collateral |
| Equipment Financing | The equipment |
| Bridge Loan | Usually asset-backed |
| Term Loan | Sometimes |
| Inventory Financing | First charge on inventory + PG |
| Acquisition Financing | Target assets + PG |