By Othman Kabbaj, Co-founder

Stacking and Existing Positions: Why the Evidence Matters More Than the Flag

A stacking flag tells you a merchant may already have MCA positions; the evidence tells you whether to fund. Before approving, adjusting or declining, an underwriter should see each position tied to its funding credit and its recurring debits, and know whether it is still active.

Last updated: 13 October 2026

Why position count alone misleads

Most funders have a line in their credit box about positions: a maximum number of open advances, a minimum position they will take, or a rule about consolidations. That rule is only as good as the count it is applied to.

A bare count of "3 positions" can be wrong in both directions.

• Overcounted. A position that was paid off or refinanced two months ago still shows debits early in the lookback period. A software subscription with a daily-looking debit pattern gets counted as an advance. The merchant is declined for a stack it does not have.
• Undercounted. A weekly debit with a vague descriptor is missed. A new funding landed in the last week of the most recent statement, before its first debit. The funder takes a position that is really fourth, not third.

Both errors cost money. Overcounting loses good merchants to competitors. Undercounting puts the funder behind more debt than its policy allows.

What evidence a position should carry

Treat every suspected position as a small case file. Before it counts toward policy, it should have:

1. The recurring debits. The individual payments, with dates, amounts and descriptors, showing the frequency (daily, weekly) and a consistent payment amount.
2. The funding credit, if visible. A large credit from the same or a related funder name, usually shortly before the debits start.
3. Start and last-seen dates. When the debits began and when they were last seen. A position whose debits stopped in month two is probably closed.
4. Estimated payment burden. The monthly total of the debits, which matters more than the count when sizing a new daily ACH.
5. Relationship to other positions. Whether a new funding was used to pay off an older position (a refinance), or added on top of it (a stack).
6. The source pages. So a second underwriter can confirm in a minute rather than re-scrubbing the statement.

A flag with this evidence attached can be decided quickly. A flag without it has to be re-investigated by hand.

Refinance or stack: a worked example

The following is illustrative, with hypothetical numbers for example only.

A merchant submits four months of statements. The parser reports "3 positions."

Read as a count, this merchant has three positions. Read as evidence, Funder B's funding appears to have paid off Funder A. That makes Funder B a refinance of A, and the merchant currently carries two active positions.

If the funder's policy allows two positions, the decision changes from decline to a possible approval. The payment burden also changes: roughly $1,300 daily plus $350 weekly, not three payments stacked together.

The flag was the same in both readings. The evidence changed the decision.

Questions to ask on every stacked file

• Are all debits attributed to a position actually MCA payments, or could some be loans, leases or subscriptions?
• Did any position stop during the lookback period, and is there a funding that explains why?
• Is there a large recent credit with no debits yet, suggesting a brand-new position?
• What is the total daily or weekly payment burden against true revenue?
• Does the merchant's application disclose the same positions the statements show?
• If policy is exceeded, is this a decline, a smaller offer, or a consolidation opportunity?

The last question is a policy decision, not an analysis step. It should be made by someone with authority and recorded with the evidence. Policy exceptions get their own post later in this series.

Where funding credits and revenue meet

A funding credit from another funder is two things at once. It is a deposit that must be removed from revenue, and it is evidence of a position. If the scrub and the position analysis are done separately, the same credit can be removed from revenue and still missed as a position.

We covered the revenue side in true revenue in MCA underwriting. The practical rule is simple: every MCA funding removed from true revenue should appear in the positions view, and every position should say whether its funding credit was found.

How DueDeal handles it

DueDeal treats positions as evidence first and a count second.

• Positions linked to transactions. Each detected MCA position is linked to its supporting debit and credit transactions, and every transaction keeps its source page.
• Refinance and stacking links. Positions are linked when one appears to refinance or stack on another, so the relationship between positions is visible instead of reconstructed by hand.
• Stacking risk level. Each file gets a stacking risk level alongside the position detail.
• Policy enforced. The funder's max-positions policy is applied to the file rather than remembered by the underwriter.
• Exceptions become gates. When a file needs a decision, it becomes a gate that an underwriter claims and decides. Every decision writes an audit entry with a frozen snapshot of the evidence and who resolved it.
• True revenue alongside. MCA fundings are also shown as their own netted category in the monthly true revenue view.

This is the difference described in detection is not resolution: the flag is where the work starts, not where it ends.

Test it on your stacked files

Pick the files your team argued about last month. Keep your CRM and analysis provider, give DueDeal 20 deals in a parallel pilot, and compare how long each position decision takes. Or book a demo.

Frequently asked questions

What is stacking in merchant cash advance? Stacking is when a merchant takes a new cash advance while one or more existing advances are still being repaid. Each additional position increases the daily or weekly payment burden on the same revenue.

How do you identify MCA positions on bank statements? Look for recurring daily or weekly debits with consistent amounts and funder-style descriptors, and for large funding credits shortly before those debits begin. Confirm when each series of debits started and whether it has stopped.

How can you tell a refinance from a stack? A refinance usually shows a new funding credit followed by the end of an older position's debits. A stack shows the new debits starting while the older debits continue.

Why is position count not enough for MCA underwriting? A count can include closed positions or non-MCA debits and can miss new fundings with no payments yet. The payment burden and the status of each position matter more than the number alone.

What should happen when a merchant exceeds a funder's max positions? The file should become a recorded exception. Someone with authority decides whether to decline, reduce the offer or consider a consolidation, and the decision is stored with the evidence.

Does DueDeal detect MCA stacking? Yes. DueDeal detects MCA positions, links each one to its supporting transactions, assigns a stacking risk level, links refinances and stacks, and enforces the funder's max-positions policy.