What Is MCA Stacking?
MCA stacking is when a business takes multiple merchant cash advances from different funders simultaneously. Each takes daily ACH withdrawals, each files a UCC lien, and the total repayment obligation often far exceeds what the business can sustain. Stacking is the single most common path to MCA default.
How Stacking Happens
The first MCA creates cash flow pressure. A second MCA provides temporary relief but adds more daily withdrawals. Within months, three to five active MCAs consume 40 to 60 percent of gross daily revenue. The business cannot survive.
Why Funders Allow Stacking
Funders charge higher factor rates to businesses with existing MCAs. Brokers earn commissions on every deal regardless of sustainability. The incentive structure rewards volume, not sustainability.
Getting Out of Stacked MCAs
Your attorney needs to evaluate all contracts simultaneously, identify lien priority, determine which funders will negotiate, and develop a global settlement strategy. Individual settlements must be coordinated. Settling with one funder without addressing others can worsen your position.
Preventing Stacking
Never take a second MCA to pay for the first. If your first MCA is creating problems, the solution is negotiation or legal intervention, not another advance.