The words get used interchangeably and they should not be. Second position describes where an advance sits in the queue; stacking describes piling obligations onto a business that cannot carry them. One is a product and the other is an outcome.
| Legitimate second position | Stacking | |
|---|---|---|
| First position disclosed? | Yes, to everyone | Often not |
| Total remittance | The receipts carry it comfortably | Consumes most of the takings |
| First agreement | Permits it, or is silent | Prohibits it |
| Merchant understands | Both obligations, in dollars | The new money |
| Funder pricing | Prices the risk knowingly | Priced without the full picture |
Check the first agreement
Many advance agreements prohibit additional financing, and taking a second position in breach can trigger a default on the first — accelerating the whole balance at exactly the moment the merchant needed money. Ask to see the first agreement before you place anything behind it. Merchants frequently do not know what theirs says.
What to tell the merchant
- The combined daily figure, in dollars, not two separate percentages.
- What that leaves them, on an average day, after both.
- That the first agreement may prohibit it, and what happens if it does.
- That second position money costs more, and why — the funder is behind somebody else in the queue.
A merchant who has been shown the combined daily number and still wants it is making a decision. One who has only been shown the new money is not.
Questions brokers ask
What is a second position MCA?
An advance that sits behind an existing one in the repayment queue. It is a legitimate product where the receipts support both remittances and the first position has been disclosed to everyone involved.
Is a second position the same as stacking?
No. Second position describes where an advance sits; stacking describes loading obligations a business cannot carry. A disclosed second position on a file that supports it is ordinary business.
Can taking a second position breach the first agreement?
Frequently, yes — many agreements prohibit additional financing, and a breach can accelerate the whole first balance. Ask to see the first agreement, because merchants often do not know what theirs says.
Why does second position money cost more?
Because the funder is behind somebody else in the queue for the same receipts. They are taking more risk for the same dollar, and the price reflects it.
What should you show a merchant before placing a second position?
The combined daily payment in dollars and what it leaves them on an average day. A merchant shown only the new money has not been given enough to make a decision.
Alex Makowski
Founder, Infinite Bookings
Runs the lead generation operation behind Infinite Bookings — paid traffic, the funding application, and the delivery pipeline that puts records into brokers’ CRMs.
Reachable directly at alex@infinitebookings.com or 732-609-7182.