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05-10-2013, 12:40 PM #14
- Join Date
- Dec 2012
- Posts
- 116
While this sounds good in theory, virtually all funding companies carefully consider the maximum repayment that a merchant can afford when calculating an MCA split or daily ACH. When a merchant stacks, that formula is jeopardized and the collection on the remaining balance becomes more risky. That is why, as others have noted, that a merchant who stacks will jeopardize their renewal chances and also their chances of being funded elsewhere. When we see a merchant that has stacked presented as a new deal to us, and it is always in the bank statements so the merchant can't hide from their actions, we are more likely to decline that merchant based on past behavior and character and also our concern that the merchant can't manage their cash flow and will stack again regardless of their promise not to do so.