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The Perils of Stacking Merchant Cash Advances

The Risks of Taking Two Merchant Cash Advances

As the merchant cash advance industry has grown a number of firms have entered the business that will fund your business on top of another advance. This practice is known in the merchant cash advance industry as “stacking” or “double funding”. Regardless of what you call it entering into a funding arrangement of this type puts you, your business, and the merchant cash advance or loan providers that service you at risk. Almost all merchant cash advance providers have clauses in their contract that bar you from taking an additional advance on the same corporation. A reputable merchant cash advance provider will not enter into this type of arrangement because it puts your business at risk.

Why Are Merchant Cash Advance Firms “Double Funding”?

During the underwriting phase an underwriter does their best to make sure that the sale of future receivables will not have a detrimental effect on a businesses cash flow. A company that stacks another merchant cash advance may take a larger percentage of sales and cripple a businesses cash flow. It is becoming more common for brokers to make up for any shortfall in the amount requested by stacking another advance or loan on top of another companies offer. Additionally there are now firms that offer programs to small business owners who may need cash before they have paid down there current merchant cash advance. If you find yourself in this situation the best advice we can give is to call your current merchant cash advance provider or broker.

The other effect of double funding is that you may find yourself on the NAMAA blacklist and no longer eligible to receive additional working capital. If you have any questions about this practice please give us a call at

Citi Wide Merchant Funding

300 Carnegie Center
Princeton, NJ 08540
Fax: (631) 532-5131


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