[Chambo]

Not knowing the exact financial situation (ie: profit margins, pending jobs/invoices, expansion plans etc) it is IMPOSSIBLE to say that any company taking on an undetermined amount of debt is bad business. Generally speaking if stacking was not an amicable / profitable "loan" it would not exist (for very long).

Any structured financing can go south, henceforth the housing bubble, should the outcome be determined by "the market". If a merchant has a viable plan and follows thru it is not at all inconceivable to borrow money at 40 points +/- for 2-3 months.

Retail Merchants cost on a T-Shirt ($2), Sale Price ($6-30+++???)

The numbers don't lie...

The error in this analysis is you are looking at merchant's gross sales vis a vis their profit. A merchant may buy or make a shirt for $2 then sell it for $6, but the $6 cannot realistically be factored off. The merchant still has other expenses that need to come out of the $4 markup. Rent, wages., utilities,. etc.

Once you get into 3 or 4 stacks, how much of the merchant's profit is eaten up? My guess is ALL OF IT. How are they supposed to pay their staff? Rent? Suppliers?

It is a disaster just waiting to happen and the game of musical chairs will in fact end at some point. It is this practice unfortunately that is incredibly short sighted for a quick buck and could end up creating irrevocable damage to the industry as a whole.

So, as I say to merchants looking to stack...." I hope that extra $5-10K goes a REALLY LONG WAY, because it will most likely be the LAST money you will be seeing for a while."