Updated · By the Swiftline Funding team
“Stacking” means taking a new merchant cash advance while you still have one (or more) open. It can solve a short-term need — but it’s also the most common way businesses get into trouble with MCAs. Here’s what you need to know.
What is a “position”?
Your first open advance is your first position. A second advance taken while the first is still open is a second position, and so on. Each position has its own daily or weekly payment, all coming out of the same bank account.
Why businesses stack advances
- A new opportunity comes up before the first advance is paid off
- Revenue dipped and cash is short
- The first advance didn’t cover the full need
The risks of stacking
- Payments add up fast. Two advances can mean two daily payments. Three can make cash flow unmanageable.
- Higher pricing. Later positions usually come with higher factor rates and shorter terms.
- A cycle of renewals. Taking new advances to cover payments on old ones is a warning sign.
- Contract conflicts. Some agreements restrict additional financing. Read your contract.
A simple test before stacking
Add up all current daily and weekly payments and the new one. Convert to a monthly total. If that total is more than about 10–15% of your monthly revenue, it’s likely to strain your cash flow.
Alternatives to stacking
- Wait for a renewal. Once you’ve paid down about 40–50% of your current advance, you may qualify for a renewal that pays off the balance and gives you additional capital — with one payment.
- MCA consolidation. Combine multiple advances into one with a single, lower payment. Learn more about MCA consolidation.
- Right-size the first advance. Request enough the first time so you don’t need a second position.
Get an honest review
Additional funding only makes sense when your revenue can comfortably support the combined payments. If it can’t, ask about consolidation or other options instead. Apply to get matched with a funding specialist.