Glossary
Loan stacking
Also called: MCA stacking, stacking
One-sentence definition
Loan stacking is when a merchant takes multiple cash advances from different funders within a short window, often without disclosure, leaving each funder believing they are the senior obligor.
Key takeaways
- Loan stacking is the leading cause of default in MCA portfolios.
- The signal in a bank statement is multiple lender deposits arriving in a short window.
- Deposits are often labeled to look like customer revenue, not lender funds.
- Some industries (transportation, freight) have legitimate factoring flows that look similar — industry tuning matters.
- Catching stacking before funding is the single highest-impact underwriting move.
Why it matters for MCA underwriting
Stacked merchants carry multiple daily or weekly debits to different funders. The combined holdback often exceeds what the merchant can sustain, and the file defaults — sometimes within thirty days of funding.
When stacking is missed, the funder wires money against apparent revenue that is partly other funders' cash. Recovery is contested in collections. Reputation damage extends beyond the single deal.
The mechanic is unique to MCA: there is no central registry of advances analogous to credit-bureau reporting on bank loans. Detection is a bank-statement problem.
How Vyaso detects loan stacking
Vyaso's loan-stacking layer identifies deposits originating from lender entities — MCA funders, fintech lenders, factors, and other fund providers — and flags when multiple of them arrive in a short window. The signature is recognized even when the deposits are described as customer payments. Industry tuning prevents legitimate factoring flows from being treated as stacking.