Stacking is one of the most divisive topics in merchant cash advance (MCA). It occurs when a business obtains more than one MCA at the same time. A second advance becomes a “second position,” and views generally become more critical as positions increase:
| 2nd positions | generally accepted by much of the industry. |
| 3rd–5th positions | more debated; potentially harmful; may make sense in select cases. |
| Above 5 | increasingly difficult to justify. |
| Above 10 | often viewed as reckless. |
The Supporters
Supporters generally view stacking as a legitimate financing solution. Common perspectives include:
- Not all stacking is the same. Funding a 3rd position is very different from funding a 10th.
- Unexpected expenses and opportunities do not follow renewal schedules; delays can mean missed payroll, lost inventory, or a closed location.
- The original funder may decline additional funding, leaving the merchant with fewer options.
- Some businesses can responsibly manage multiple advances.
- Position count alone says very little about a business’s ability to repay.
The Opposers
Opponents generally view stacking as harmful for merchants and funding companies. Common concerns include:
- New advances are used to repay existing advances.
- Multiple advances increase the risk of missed payments.
- Missed payments put small business owners through collections, lawsuits, asset seizures.
- Damages renewal opportunities with the original funder and broker.
- Fueled by brokers focused on today’s commission over long-term sustainability.
- Fueled by aggressive solicitation and “backdoored” deals.
My Final Thoughts
Reasonable people can arrive at very different conclusions about stacking. Finding common ground will likely prove more productive than debating position counts alone. Whether opinions change or remain divided, meaningful progress is more likely to come from open discussion among brokers, funders, trade groups, and other industry voices. The issue might be more complex than simply counting positions.
