[Chambo]

Some companies who stack use the approach of total gross funding. I.E. merchant ABC (in their eyes) qualifies for a max of $50,000. Funding Company Y only gave them $20,000, so there is room to add $30,000.

Now the folks out there who simply add for the sake of adding and pocketing quick cash, that's another issue entirely. One, alas, that will only be reigned in with litigation. Every funder should put a clause in their contract about what causes breach and what doesn't. However, there is inherently nothing illegal amount a merchant looking for more money. Simply because funder X's parameters aren't met, doesn't mean funder Y's aren't. The question arises "does the second deal impede upon the first deal?" If the second debit causes collection issues on the first, well, then you have a problem.

[Finance1]

The question arises "does the second deal impede upon the first deal?" If the second debit causes collection issues on the first, well, then you have a problem.

Very good post. I'll pulled the last statement because that is really the only thing that matters right? We've only been stacked (that we know of) once and it is a collection problem. If there are others in our portfolio that are stacked but aren't missing a beat then we don't really care. It's an ethics thing. The merchant that we're having problems with was not a strong candidate on any level. Pearl figured they could get in and get out but as I recently found out, they aren't getting out. Merchant shut them off and is having a lawyer look at it for usary. He's still paying us and has apologized but damage has been done regardless. Remittance is way off and now Pearl is blowing him up with threat of litigation and judgments. With my luck they win their suit and freeze his bank and we get screwed anyway.

As others have said, it's pretty much something we have to deal with from time to time. There is money to be made in stacking and companies will do it. They should put their money where their mouth is though. If they really believe a merchant can handle both debts then just pay off the advance in place. LOL

[Chambo]

Very good post. I'll pulled the last statement because that is really the only thing that matters right? We've only been stacked (that we know of) once and it is a collection problem. If there are others in our portfolio that are stacked but aren't missing a beat then we don't really care. It's an ethics thing. The merchant that we're having problems with was not a strong candidate on any level. Pearl figured they could get in and get out but as I recently found out, they aren't getting out. Merchant shut them off and is having a lawyer look at it for usary. He's still paying us and has apologized but damage has been done regardless. Remittance is way off and now Pearl is blowing him up with threat of litigation and judgments. With my luck they win their suit and freeze his bank and we get screwed anyway.

As others have said, it's pretty much something we have to deal with from time to time. There is money to be made in stacking and companies will do it. They should put their money where their mouth is though. If they really believe a merchant can handle both debts then just pay off the advance in place. LOL

The ironic part is, try stacking on one of the companies listed who are known to stack and watch them start screaming and wailing and accusing

[AndyYSCISOdept]

I 100% agree with you Chambo. The main issue is that there are people who stack without regard for anything except the money it puts in their pockets. And while I agree that there are 3 parties involved, if the reps stop pushing these deals and the funders stop stacking it would allow funders to give better offers because they wouldnt underwrite in fear of being stacked on and causing an unforseen default. You can't underwrite properly and give merchants the money they deserve because one (the UWers) must expect to be stacked on and put their funds at risk. The only one who wins is the broker.