What Is Stacking — and Why It Hurts Merchants

Stacking is taking an additional advance while an existing one is outstanding. Each position adds a daily debit against the same deposits, so total outflow rises while revenue does not.

Two positions at 10 percent each are not 20 percent of profit — they are 20 percent of gross deposits, which for most businesses exceeds the entire net margin.

The second position tightens cash, which makes a third position feel necessary within weeks. Later positions price higher because the risk is visibly worse, so the cost curve steepens exactly as capacity falls.

Underwriters call the resulting pattern a debt spiral because the timeline from position two to distress is measured in months, not years.

Go back to the original funder for an add-on or a renewal, which replaces rather than layers. Consolidate into a single lower-outflow structure. Or fix the operating gap without capital.

Any funder willing to place a third position on a struggling file without asking what changed is not underwriting your business — they are pricing your desperation.