A merchant taking an additional advance while an earlier one is still outstanding, so multiple remittances draw on the same receipts.
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.
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.
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