Anti-Stacking Clause: Meaning in a Merchant Cash Advance
An anti-stacking clause is the part of an advance contract that bars you from selling future sales to another funder, or taking another advance, while this one is open. Breaking it is usually an event of default, which can make the full balance due. If you need more money, ask your current funder first or ask for written consent.
Where does it show up?
In the covenants or representations section, and listed again under events of default. It usually mentions other financing, other purchases of receivables, or liens.
What happens if you break an anti-stacking clause?
Taking another advance against the same sales is usually listed as a default. The funder can then demand the full balance, add the default fees the contract names, and stop any reconciliation it offered. Tell your funder and your broker before you sign a second position, not after.
What does it look like in practice?
You have $25,000 left on a first advance with an anti-stacking clause. You take a second advance with a $300 daily debit. The first funder sees the new debit and can call a default on the $25,000. Asking first often gets you an add-on instead.
Which owner question goes with this term?
Will my funder find out about another advance? Answers to the questions owners ask about this term, with what to ask the funder.
A term on your offer you don't recognize?
Send us the line and we'll tell you what it means. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.