Funders object because a second position does not create new revenue, it divides revenue already committed. Default rates on stacked positions exceed 40%, against 11–18% typically — nothing about those businesses differs except how much of the daily take is spoken for before anyone else is paid.
Full guide
What is stacking, and why funders care so muchWhy a second position changes everything about the first.
Related terms
Position
An individual outstanding advance against a merchant, counted in order — first position, second position, and so on.
UCC-1 financing statement
A public notice filed with the secretary of state recording a secured party’s claim against a business’s assets.
Default rate
The share of advances that fail to be repaid in full under their original terms.
Factoring
Selling outstanding invoices to a third party at a discount for immediate cash.
First position
The earliest outstanding advance against a merchant, with priority over any that follow.
Consolidation
A single new advance used to pay off two or more existing positions, replacing several remittances with one.